CTO
CTO Realty Growth, Inc.
$20.53
Real Estate Investment Trust
85%
P/FFO × Diversified REIT Multiple
Strong
·
Conviction
Undervalued
Trading 45.2% below fair value
You pay
$20.53
Bear
$31.05
Fair
$37.43
Bull
$43.81
Bear
$31.05
+51.2%
$1.87 FFO × 18x
Fair
$37.43
+82.3%
$1.87 FFO × 22x
Bull
$43.81
+113.4%
$1.87 FFO × 26x
Adjust Assumptions
22.1x
$
Key Value Driver
FFO/share ($1.87) × diversified P/FFO multiple
Implied Market Multiple
11.0x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (10 analysts)
$24.67
Divergence from AlphaVal
52%
Summary
At $1.87 FFO/share with a 22x diversified REIT multiple, the base-case value is $37.43 per share. Dividend yield: 7.4%. DDM cross-check: $28.33.
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 7.4% is unusually high — make sure the company generates enough cash to keep paying it.
Wall Street's average price target is $24.67 (from 10 analysts). Our estimate is 52% 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