NNN
NNN REIT, Inc.
$45.00
Real Estate Investment Trust
85%
P/FFO × Retail REIT Multiple
Moderate
·
Conviction
Fair Value
Trading 15.3% below fair value
You pay
$45.00
Bear
$43.16
Fair
$53.14
Bull
$63.13
Bear
$43.16
-4.1%
$3.46 FFO × 14x
Fair
$53.14
+18.1%
$3.46 FFO × 17x
Bull
$63.13
+40.3%
$3.46 FFO × 21x
Key Value Driver
FFO/share ($3.46) × retail P/FFO multiple
Implied Market Multiple
13.0x
Summary
Our base-case estimate uses P/FFO × Retail REIT Multiple. We then blend that result with the average analyst price target of $46.06 from 29 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $53.14 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 5.3% 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