CIM
Chimera Investment Corporation
$11.50
Real Estate Investment Trust
85%
P/FFO × Default REIT Multiple
Strong
·
Conviction
Undervalued
Trading 80.3% below fair value
You pay
$11.50
Bear
$48.46
Fair
$58.38
Bull
$68.30
Bear
$48.46
+321.4%
$2.84 FFO × 18x
Fair
$58.38
+407.6%
$2.84 FFO × 22x
Bull
$68.30
+493.9%
$2.84 FFO × 26x
Adjust Assumptions
22.1x
$
Key Value Driver
FFO/share ($2.84) × default P/FFO multiple
Implied Market Multiple
4.0x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (16 analysts)
$10.75
Divergence from AlphaVal
443%
Summary
At $2.84 FFO/share with a 22x default REIT multiple, the base-case value is $58.38 per share. Dividend yield: 14.3%. DDM cross-check: $48.07.
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 14.3% is unusually high — make sure the company generates enough cash to keep paying it.
Wall Street's average price target is $10.75 (from 16 analysts). Our estimate is 443% 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