INVH
Invitation Homes Inc.
$29.60
Real Estate Investment Trust
85%
P/FFO × Residential REIT Multiple
Strong
·
Conviction
Undervalued
Trading 66.2% below fair value
You pay
$29.60
Bear
$74.16
Fair
$87.53
Bull
$100.90
Bear
$74.16
+150.6%
$2.25 FFO × 21x
Fair
$87.53
+195.7%
$2.25 FFO × 25x
Bull
$100.90
+240.9%
$2.25 FFO × 29x
Key Value Driver
FFO/share ($2.25) × residential P/FFO multiple
Implied Market Multiple
13.2x
Summary
Our base-case estimate uses P/FFO × Residential REIT Multiple. We then blend that result with the average analyst price target of $31.69 from 34 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $87.53 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: $242.04 (117% above our primary estimate). Large gaps suggest the dividend may not fully reflect the company's value.
Wall Street's average price target is $31.69 (from 34 analysts). Our estimate is 252% 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