EGP
EastGroup Properties, Inc.
$198.12
Real Estate Investment Trust
85%
P/FFO × Industrial REIT Multiple
Strong
·
Conviction
Undervalued
Trading 49.9% below fair value
You pay
$198.12
Bear
$330.62
Fair
$395.58
Bull
$460.53
Bear
$330.62
+66.9%
$8.82 FFO × 23x
Fair
$395.58
+99.7%
$8.82 FFO × 29x
Bull
$460.53
+132.5%
$8.82 FFO × 34x
Adjust Assumptions
28.6x
$
Key Value Driver
FFO/share ($8.82) × industrial P/FFO multiple
Implied Market Multiple
22.5x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (33 analysts)
$230.58
Divergence from AlphaVal
72%
Summary
At $8.82 FFO/share with a 29x industrial REIT multiple, the base-case value is $395.58 per share. Dividend yield: 3.2%. DDM cross-check: $730.17.
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: $730.17 (85% above our primary estimate). Large gaps suggest the dividend may not fully reflect the company's value.
Wall Street's average price target is $230.58 (from 33 analysts). Our estimate is 72% 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