FPI
Farmland Partners Inc.
$9.62
Real Estate Investment Trust
85%
P/FFO × Specialty REIT Multiple
Strong
·
Conviction
Undervalued
Trading 62.7% below fair value
You pay
$9.62
Bear
$21.03
Fair
$25.82
Bull
$30.60
Bear
$21.03
+118.7%
$0.82 FFO × 29x
Fair
$25.82
+168.4%
$0.82 FFO × 35x
Bull
$30.60
+218.0%
$0.82 FFO × 42x
Key Value Driver
FFO/share ($0.82) × specialty P/FFO multiple
Implied Market Multiple
11.7x
Summary
Our base-case estimate uses P/FFO × Specialty REIT Multiple. We then blend that result with the average analyst price target of $17.00 from 15 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $25.82 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.
Wall Street's average price target is $17.00 (from 15 analysts). Our estimate is 69% 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