NLY
Annaly Capital Management, Inc.
$22.71
Real Estate Investment Trust
85%
P/FFO × Default REIT Multiple
Strong
·
Conviction
Undervalued
Trading 61.8% below fair value
You pay
$22.71
Bear
$49.02
Fair
$59.52
Bull
$70.02
Bear
$49.02
+115.8%
$2.69 FFO × 18x
Fair
$59.52
+162.1%
$2.69 FFO × 22x
Bull
$70.02
+208.3%
$2.69 FFO × 26x
Adjust Assumptions
22.1x
$
Key Value Driver
FFO/share ($2.69) × default P/FFO multiple
Implied Market Multiple
8.4x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (28 analysts)
$23.50
Divergence from AlphaVal
153%
Summary
At $2.69 FFO/share with a 22x default REIT multiple, the base-case value is $59.52 per share. Dividend yield: 12.5%.
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 12.5% is unusually high — make sure the company generates enough cash to keep paying it.
Wall Street's average price target is $23.50 (from 28 analysts). Our estimate is 153% 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