HR
Healthcare Realty Trust Incorporated
$17.98
Real Estate Investment Trust
85%
P/FFO × Healthcare REIT Multiple
Mild
·
Conviction
Fair Value
Trading 6.6% below fair value
You pay
$17.98
Bear
$14.96
Fair
$19.24
Bull
$23.52
Bear
$14.96
-16.8%
$0.92 FFO × 16x
Fair
$19.24
+7.0%
$0.92 FFO × 21x
Bull
$23.52
+30.8%
$0.92 FFO × 26x
Adjust Assumptions
21.0x
$
Key Value Driver
FFO/share ($0.92) × healthcare P/FFO multiple
Implied Market Multiple
19.6x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (30 analysts)
$22.00
Divergence from AlphaVal
13%
Summary
At $0.92 FFO/share with a 21x healthcare REIT multiple, the base-case value is $19.24 per share. Dividend yield: 5.3%. DDM cross-check: $17.89.
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 5.3% is unusually high — make sure the company generates enough cash to keep paying it.
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