BXMT
Blackstone Mortgage Trust, Inc.
$17.10
Real Estate Investment Trust
85%
P/FFO × Default REIT Multiple
Moderate
·
Conviction
Undervalued
Trading 32.7% below fair value
You pay
$17.10
Bear
$21.19
Fair
$25.40
Bull
$29.63
Bear
$21.19
+23.9%
$1.06 FFO × 18x
Fair
$25.40
+48.6%
$1.06 FFO × 22x
Bull
$29.63
+73.3%
$1.06 FFO × 26x
Key Value Driver
FFO/share ($1.06) × default P/FFO multiple
Implied Market Multiple
16.2x
Summary
Our base-case estimate uses P/FFO × Default REIT Multiple. We then blend that result with the average analyst price target of $21.00 from 18 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $25.40 per share.
Warnings
Standard profit figures are misleading for real estate companies — large non-cash accounting charges make profits look artificially low. Dividend yield and funds from operations are better measures.
Dividend yield of 11.0% is unusually high — make sure the company generates enough cash to keep paying it.
Dividend-based valuation: $35.04 (30% above our primary estimate). Large gaps suggest the dividend may not fully reflect the company's value.
Wall Street's average price target is $21.00 (from 18 analysts). Our estimate is 28% above the consensus -- consider that gap carefully.
Key Risks
- P/E and EV/EBITDA are structurally wrong for REITs — use P/FFO and NAV
- Interest rate sensitivity: REIT multiples compress when rates rise
- FFO approximation (NI + D&A) may include gains on property sales — verify