CTO
CTO Realty Growth, Inc.
$22.00
Real Estate Investment Trust
85%
P/FFO × Diversified REIT Multiple
Strong
·
Conviction
Undervalued
Trading 40.6% below fair value
You pay
$22.00
Bear
$30.69
Fair
$37.01
Bull
$43.34
Bear
$30.69
+39.5%
$2.08 FFO × 18x
Fair
$37.01
+68.2%
$2.08 FFO × 22x
Bull
$43.34
+97.0%
$2.08 FFO × 26x
Key Value Driver
FFO/share ($2.08) × diversified P/FFO multiple
Implied Market Multiple
10.6x
Summary
Our base-case estimate uses P/FFO × Diversified REIT Multiple. We then blend that result with the average analyst price target of $22.67 from 10 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $37.01 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 6.9% is unusually high — make sure the company generates enough cash to keep paying it.
Dividend-based valuation: $28.33 (30% below our primary estimate). Large gaps suggest the dividend may not fully reflect the company's value.
Wall Street's average price target is $22.67 (from 10 analysts). Our estimate is 79% 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