CUBE
CubeSmart
$40.07
Real Estate Investment Trust
85%
P/FFO × Industrial REIT Multiple
Moderate
·
Conviction
Undervalued
Trading 37.7% below fair value
You pay
$40.07
Bear
$52.60
Fair
$64.30
Bull
$75.99
Bear
$52.60
+31.3%
$2.60 FFO × 23x
Fair
$64.30
+60.5%
$2.60 FFO × 28x
Bull
$75.99
+89.6%
$2.60 FFO × 33x
Key Value Driver
FFO/share ($2.60) × industrial P/FFO multiple
Implied Market Multiple
15.4x
Summary
Our base-case estimate uses P/FFO × Industrial REIT Multiple. We then blend that result with the average analyst price target of $40.33 from 29 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $64.30 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 5.3% is unusually high — make sure the company generates enough cash to keep paying it.
Wall Street's average price target is $40.33 (from 29 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