NNN
NNN REIT, Inc.
$42.03
Real Estate Investment Trust
85%
P/FFO × Retail REIT Multiple
Moderate
·
Conviction
Fair Value
Trading 24.4% below fair value
You pay
$42.03
Bear
$45.17
Fair
$55.61
Bull
$66.06
Bear
$45.17
+7.5%
$3.46 FFO × 14x
Fair
$55.61
+32.3%
$3.46 FFO × 17x
Bull
$66.06
+57.2%
$3.46 FFO × 21x
Adjust Assumptions
17.4x
$
Key Value Driver
FFO/share ($3.46) × retail P/FFO multiple
Implied Market Multiple
12.1x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (29 analysts)
$47.25
Divergence from AlphaVal
18%
Summary
At $3.46 FFO/share with a 17x retail REIT multiple, the base-case value is $55.61 per share. Dividend yield: 5.8%. DDM cross-check: $45.19.
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 5.8% is unusually high — make sure the company generates enough cash to keep paying it.
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