MPW
Medical Properties Trust, Inc.
$5.36
Real Estate Investment Trust
85%
P/FFO × Healthcare REIT Multiple
Moderate
·
Conviction
Overvalued
Trading 35.3% above fair value
You pay
$5.36
Bear
$3.23
Fair
$3.96
Bull
$4.70
Bear
$3.23
-39.8%
$0.12 FFO × 18x
Fair
$3.96
-26.1%
$0.12 FFO × 23x
Bull
$4.70
-12.4%
$0.12 FFO × 28x
Adjust Assumptions
22.6x
$
Key Value Driver
FFO/share ($0.12) × healthcare P/FFO multiple
Implied Market Multiple
43.5x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (28 analysts)
$11.54
Divergence from AlphaVal
66%
Summary
At $0.12 FFO/share with a 23x healthcare REIT multiple, the base-case value is $3.96 per share. Dividend yield: 6.7%. DDM cross-check: $6.71.
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 6.7% is unusually high — make sure the company generates enough cash to keep paying it.
Dividend-based valuation: $6.71 (69% 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 66% 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