DLR
Digital Realty Trust, Inc.
$178.98
Real Estate Investment Trust
85%
P/FFO × Specialty REIT Multiple
Moderate
·
Conviction
Fair Value
Trading 23.5% below fair value
You pay
$178.98
Bear
$191.29
Fair
$233.85
Bull
$276.41
Bear
$191.29
+6.9%
$8.66 FFO × 29x
Fair
$233.85
+30.7%
$8.66 FFO × 35x
Bull
$276.41
+54.4%
$8.66 FFO × 42x
Adjust Assumptions
35.1x
$
Key Value Driver
FFO/share ($8.66) × specialty P/FFO multiple
Implied Market Multiple
20.7x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (49 analysts)
$222.35
Divergence from AlphaVal
5%
Summary
At $8.66 FFO/share with a 35x specialty REIT multiple, the base-case value is $233.85 per share. Dividend yield: 2.7%. DDM cross-check: $70.41.
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