DLR
Digital Realty Trust, Inc.
$188.18
Real Estate Investment Trust
85%
P/FFO × Specialty REIT Multiple
Moderate
·
Conviction
Fair Value
Trading 17.9% below fair value
You pay
$188.18
Bear
$187.42
Fair
$229.12
Bull
$270.81
Bear
$187.42
-0.4%
$8.66 FFO × 29x
Fair
$229.12
+21.8%
$8.66 FFO × 35x
Bull
$270.81
+43.9%
$8.66 FFO × 42x
Key Value Driver
FFO/share ($8.66) × specialty P/FFO multiple
Implied Market Multiple
21.7x
Summary
Our base-case estimate uses P/FFO × Specialty REIT Multiple. We then blend that result with the average analyst price target of $218.07 from 48 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $229.12 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: $70.41 (70% below our primary estimate). Large gaps suggest the dividend may not fully reflect the company's value.
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