INVH
Invitation Homes Inc.
$29.29
Real Estate Investment Trust
85%
P/FFO × Residential REIT Multiple
Moderate
·
Conviction
Undervalued
Trading 39.2% below fair value
You pay
$29.29
Bear
$40.60
Fair
$48.21
Bull
$55.83
Bear
$40.60
+38.6%
$2.25 FFO × 21x
Fair
$48.21
+64.6%
$2.25 FFO × 25x
Bull
$55.83
+90.6%
$2.25 FFO × 29x
Key Value Driver
FFO/share ($2.25) × residential P/FFO multiple
Implied Market Multiple
13.0x
Summary
Our base-case estimate uses P/FFO × Residential REIT Multiple. We then blend that result with the average analyst price target of $31.20 from 33 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $48.21 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.
Wall Street's average price target is $31.20 (from 33 analysts). Our estimate is 78% 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