FBRT
Franklin BSP Realty Trust, Inc.
$6.36
Real Estate Investment Trust
85%
P/FFO × Default REIT Multiple
Strong
·
Conviction
Undervalued
Trading 71.7% below fair value
You pay
$6.36
Bear
$18.63
Fair
$22.45
Bull
$26.27
Bear
$18.63
+193.2%
$1.11 FFO × 18x
Fair
$22.45
+253.3%
$1.11 FFO × 22x
Bull
$26.27
+313.4%
$1.11 FFO × 26x
Adjust Assumptions
22.1x
$
Key Value Driver
FFO/share ($1.11) × default P/FFO multiple
Implied Market Multiple
5.7x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (6 analysts)
$10.00
Divergence from AlphaVal
124%
Summary
At $1.11 FFO/share with a 22x default REIT multiple, the base-case value is $22.45 per share. Dividend yield: 15.0%. DDM cross-check: $17.80.
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 yield of 15.0% is unusually high — make sure the company generates enough cash to keep paying it.
Wall Street's average price target is $10.00 (from 6 analysts). Our estimate is 124% 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