NLY
Annaly Capital Management, Inc.
$18.23
Real Estate Investment Trust
85%
P/FFO × Default REIT Multiple
Strong
·
Conviction
Undervalued
Trading 69.8% below fair value
You pay
$18.23
Bear
$49.77
Fair
$60.44
Bull
$71.11
Bear
$49.77
+173.0%
$2.73 FFO × 18x
Fair
$60.44
+231.5%
$2.73 FFO × 22x
Bull
$71.11
+290.1%
$2.73 FFO × 26x
Adjust Assumptions
22.1x
$
Key Value Driver
FFO/share ($2.73) × default P/FFO multiple
Implied Market Multiple
6.7x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (28 analysts)
$22.00
Divergence from AlphaVal
175%
Summary
At $2.73 FFO/share with a 22x default REIT multiple, the base-case value is $60.44 per share. Dividend yield: 15.9%.
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 15.9% is unusually high — make sure the company generates enough cash to keep paying it.
Wall Street's average price target is $22.00 (from 28 analysts). Our estimate is 175% 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