HPP
Hudson Pacific Properties, Inc.
$10.30
Real Estate Investment Trust
85%
P/FFO × Office REIT Multiple
Strong
·
Conviction
Undervalued
Trading 64.5% below fair value
You pay
$10.30
Bear
$22.54
Fair
$29.03
Bull
$35.51
Bear
$22.54
+118.9%
$2.23 FFO × 13x
Fair
$29.03
+181.8%
$2.23 FFO × 17x
Bull
$35.51
+244.8%
$2.23 FFO × 21x
Adjust Assumptions
16.9x
$
Key Value Driver
FFO/share ($2.23) × office P/FFO multiple
Implied Market Multiple
4.6x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (23 analysts)
$15.29
Divergence from AlphaVal
90%
Summary
At $2.23 FFO/share with a 17x office REIT multiple, the base-case value is $29.03 per share. Dividend yield: 4.6%. DDM cross-check: $8.85.
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: $8.85 (70% below our primary estimate). Large gaps suggest the dividend may not fully reflect the company's value.
Wall Street's average price target is $15.29 (from 23 analysts). Our estimate is 90% above the consensus -- consider that gap carefully.
This stock is 45% below its 52-week high, with weak or declining earnings. That combination often signals real trouble, even though the valuation below is based on other fundamentals.
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