CHCT
Community Healthcare Trust Incorporated
$17.38
Real Estate Investment Trust
85%
P/FFO × Healthcare REIT Multiple
Strong
·
Conviction
Undervalued
Trading 41.6% below fair value
You pay
$17.38
Bear
$23.15
Fair
$29.76
Bull
$36.37
Bear
$23.15
+33.2%
$1.70 FFO × 15x
Fair
$29.76
+71.2%
$1.70 FFO × 20x
Bull
$36.37
+109.3%
$1.70 FFO × 24x
Key Value Driver
FFO/share ($1.70) × healthcare P/FFO multiple
Implied Market Multiple
10.2x
Summary
Our base-case estimate uses P/FFO × Healthcare REIT Multiple. We then blend that result with the average analyst price target of $18.50 from 16 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $29.76 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.
Wall Street's average price target is $18.50 (from 16 analysts). Our estimate is 81% 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