CLDT
Chatham Lodging Trust
$13.04
Real Estate Investment Trust
85%
P/FFO × Default REIT Multiple
Strong
·
Conviction
Undervalued
Trading 51.5% below fair value
You pay
$13.04
Bear
$22.22
Fair
$26.91
Bull
$31.61
Bear
$22.22
+70.4%
$1.60 FFO × 18x
Fair
$26.91
+106.4%
$1.60 FFO × 22x
Bull
$31.61
+142.4%
$1.60 FFO × 26x
Adjust Assumptions
22.1x
$
Key Value Driver
FFO/share ($1.60) × default P/FFO multiple
Implied Market Multiple
8.1x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (13 analysts)
$13.67
Divergence from AlphaVal
97%
Summary
At $1.60 FFO/share with a 22x default REIT multiple, the base-case value is $26.91 per share. Dividend yield: 2.9%. DDM cross-check: $7.08.
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-based valuation: $7.08 (74% below our primary estimate). Large gaps suggest the dividend may not fully reflect the company's value.
Wall Street's average price target is $13.67 (from 13 analysts). Our estimate is 97% 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