IRT
Independence Realty Trust, Inc.
$14.77
Real Estate Investment Trust
85%
P/FFO × Residential REIT Multiple
Strong
·
Conviction
Undervalued
Trading 53.0% below fair value
You pay
$14.77
Bear
$26.45
Fair
$31.41
Bull
$36.37
Bear
$26.45
+79.1%
$1.27 FFO × 21x
Fair
$31.41
+112.7%
$1.27 FFO × 25x
Bull
$36.37
+146.2%
$1.27 FFO × 29x
Adjust Assumptions
24.7x
$
Key Value Driver
FFO/share ($1.27) × residential P/FFO multiple
Implied Market Multiple
11.6x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (28 analysts)
$18.67
Divergence from AlphaVal
68%
Summary
At $1.27 FFO/share with a 25x residential REIT multiple, the base-case value is $31.41 per share. Dividend yield: 4.7%.
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 $18.67 (from 28 analysts). Our estimate is 68% 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