GNL
Global Net Lease, Inc.
$9.12
Real Estate Investment Trust
85%
P/FFO × Diversified REIT Multiple
Strong
·
Conviction
Undervalued
Trading 48.0% below fair value
You pay
$9.12
Bear
$14.56
Fair
$17.55
Bull
$20.53
Bear
$14.56
+59.7%
$1.05 FFO × 15x
Fair
$17.55
+92.4%
$1.05 FFO × 18x
Bull
$20.53
+125.1%
$1.05 FFO × 21x
Adjust Assumptions
18.1x
$
Key Value Driver
FFO/share ($1.05) × diversified P/FFO multiple
Implied Market Multiple
8.7x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (16 analysts)
$10.00
Divergence from AlphaVal
76%
Summary
At $1.05 FFO/share with a 18x diversified REIT multiple, the base-case value is $17.55 per share. Dividend yield: 8.3%. DDM cross-check: $14.16.
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 8.3% is unusually high — make sure the company generates enough cash to keep paying it.
Wall Street's average price target is $10.00 (from 16 analysts). Our estimate is 76% 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