MPW
Medical Properties Trust, Inc.
$5.36
Real Estate Investment Trust
85%
P/FFO × Healthcare REIT Multiple
Moderate
·
Conviction
Overvalued
Trading 34.2% above fair value
You pay
$5.36
Bear
$3.25
Fair
$4.00
Bull
$4.73
Bear
$3.25
-39.3%
$0.11 FFO × 18x
Fair
$4.00
-25.5%
$0.11 FFO × 23x
Bull
$4.73
-11.8%
$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 $5.00 from 28 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $4.00 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 6.3% is unusually high — make sure the company generates enough cash to keep paying it.
Dividend-based valuation: $6.34 (73% above our primary estimate). Large gaps suggest the dividend may not fully reflect the company's value.
Wall Street's average price target is $5.00 (from 28 analysts). Our estimate is 27% 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