CUBE
CubeSmart
$37.23
Real Estate Investment Trust
85%
P/FFO × Industrial REIT Multiple
Strong
·
Conviction
Undervalued
Trading 45.8% below fair value
You pay
$37.23
Bear
$56.73
Fair
$68.65
Bull
$80.57
Bear
$56.73
+52.4%
$2.61 FFO × 23x
Fair
$68.65
+84.4%
$2.61 FFO × 28x
Bull
$80.57
+116.4%
$2.61 FFO × 33x
Adjust Assumptions
27.8x
$
Key Value Driver
FFO/share ($2.61) × industrial P/FFO multiple
Implied Market Multiple
14.2x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (29 analysts)
$44.00
Divergence from AlphaVal
56%
Summary
At $2.61 FFO/share with a 28x industrial REIT multiple, the base-case value is $68.65 per share. Dividend yield: 5.7%. DDM cross-check: $59.27.
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 5.7% is unusually high — make sure the company generates enough cash to keep paying it.
Wall Street's average price target is $44.00 (from 29 analysts). Our estimate is 56% 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