DLR
Digital Realty Trust, Inc.
$184.20
Real Estate Investment Trust
85%
P/FFO × Specialty REIT Multiple
Moderate
·
Conviction
Fair Value
Trading 21.4% below fair value
You pay
$184.20
Bear
$191.58
Fair
$234.24
Bull
$276.90
Bear
$191.58
+4.0%
$9.12 FFO × 29x
Fair
$234.24
+27.2%
$9.12 FFO × 35x
Bull
$276.90
+50.3%
$9.12 FFO × 42x
Key Value Driver
FFO/share ($9.12) × specialty P/FFO multiple
Implied Market Multiple
20.2x
Summary
Our base-case estimate uses P/FFO × Specialty REIT Multiple. We then blend that result with the average analyst price target of $208.92 from 48 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $234.24 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 (71% 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