INN
Summit Hotel Properties, Inc.
$7.02
Real Estate Investment Trust
85%
P/FFO × Default REIT Multiple
Strong
·
Conviction
Undervalued
Trading 63.1% below fair value
You pay
$7.02
Bear
$15.69
Fair
$19.01
Bull
$22.32
Bear
$15.69
+123.5%
$1.31 FFO × 18x
Fair
$19.01
+170.8%
$1.31 FFO × 22x
Bull
$22.32
+218.0%
$1.31 FFO × 26x
Key Value Driver
FFO/share ($1.31) × default P/FFO multiple
Implied Market Multiple
5.4x
Summary
Our base-case estimate uses P/FFO × Default REIT Multiple. We then blend that result with the average analyst price target of $7.00 from 14 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $19.01 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-based valuation: $5.96 (73% below our primary estimate). Large gaps suggest the dividend may not fully reflect the company's value.
Wall Street's average price target is $7.00 (from 14 analysts). Our estimate is 214% 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