GNL
Global Net Lease, Inc.
$9.33
Real Estate Investment Trust
85%
P/FFO × Diversified REIT Multiple
Strong
·
Conviction
Undervalued
Trading 40.9% below fair value
You pay
$9.33
Bear
$13.10
Fair
$15.79
Bull
$18.47
Bear
$13.10
+40.4%
$1.05 FFO × 15x
Fair
$15.79
+69.2%
$1.05 FFO × 18x
Bull
$18.47
+97.9%
$1.05 FFO × 21x
Key Value Driver
FFO/share ($1.05) × diversified P/FFO multiple
Implied Market Multiple
8.9x
Summary
Our base-case estimate uses P/FFO × Diversified REIT Multiple. We then blend that result with the average analyst price target of $10.50 from 16 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $15.79 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 yield of 8.1% is unusually high — make sure the company generates enough cash to keep paying it.
Wall Street's average price target is $10.50 (from 16 analysts). Our estimate is 67% 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