ELS
Equity LifeStyle Properties, Inc.
$63.55
Real Estate Investment Trust
85%
P/FFO × Residential REIT Multiple
Moderate
·
Conviction
Undervalued
Trading 25.2% below fair value
You pay
$63.55
Bear
$71.88
Fair
$84.96
Bull
$98.05
Bear
$71.88
+13.1%
$3.07 FFO × 18x
Fair
$84.96
+33.7%
$3.07 FFO × 21x
Bull
$98.05
+54.3%
$3.07 FFO × 25x
Key Value Driver
FFO/share ($3.07) × residential P/FFO multiple
Implied Market Multiple
20.7x
Summary
Our base-case estimate uses P/FFO × Residential REIT Multiple. We then blend that result with the average analyst price target of $70.71 from 21 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $84.96 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: $147.01 (64% above our primary estimate). Large gaps suggest the dividend may not fully reflect the company's value.
Wall Street's average price target is $70.71 (from 21 analysts). Our estimate is 27% 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