MPW
Medical Properties Trust, Inc.
$5.36
Real Estate Investment Trust
85%
P/FFO × Healthcare REIT Multiple
Mild
·
Conviction
Fair Value
Trading 5.4% below fair value
You pay
$5.36
Bear
$4.63
Fair
$5.67
Bull
$6.71
Bear
$4.63
-13.6%
$0.11 FFO × 18x
Fair
$5.67
+5.7%
$0.11 FFO × 23x
Bull
$6.71
+25.1%
$0.11 FFO × 28x
Key Value Driver
FFO/share ($0.11) × healthcare P/FFO multiple
Implied Market Multiple
48.3x
Summary
Our base-case estimate uses P/FFO × Healthcare REIT Multiple. We then blend that result with the average analyst price target of $11.54 from 28 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $5.67 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 yield of 6.5% is unusually high — make sure the company generates enough cash to keep paying it.
Dividend-based valuation: $6.52 (76% above our primary estimate). Large gaps suggest the dividend may not fully reflect the company's value.
Wall Street's average price target is $11.54 (from 28 analysts). Our estimate is 68% below 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