CLDT
Chatham Lodging Trust
$10.70
Real Estate Investment Trust
85%
P/FFO × Default REIT Multiple
Strong
·
Conviction
Undervalued
Trading 55.0% below fair value
You pay
$10.70
Bear
$19.63
Fair
$23.79
Bull
$27.93
Bear
$19.63
+83.5%
$1.60 FFO × 18x
Fair
$23.79
+122.3%
$1.60 FFO × 22x
Bull
$27.93
+161.1%
$1.60 FFO × 26x
Key Value Driver
FFO/share ($1.60) × default P/FFO multiple
Implied Market Multiple
6.7x
Summary
Our base-case estimate uses P/FFO × Default REIT Multiple. We then blend that result with the average analyst price target of $11.50 from 13 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $23.79 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-based valuation: $6.90 (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 $11.50 (from 13 analysts). Our estimate is 134% 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