PECO
Phillips Edison & Co.
$43.13
Real Estate Investment Trust
85%
P/FFO × Retail REIT Multiple
Mild
·
Conviction
Overvalued
Trading 0.1% above fair value
You pay
$43.13
Bear
$34.55
Fair
$43.07
Bull
$51.59
Bear
$34.55
-19.9%
$3.00 FFO × 16x
Fair
$43.07
-0.1%
$3.00 FFO × 20x
Bull
$51.59
+19.6%
$3.00 FFO × 23x
Key Value Driver
FFO/share ($3.00) × retail P/FFO multiple
Implied Market Multiple
14.4x
Summary
Our base-case estimate uses P/FFO × Retail REIT Multiple. We then blend that result with the average analyst price target of $43.80 from 15 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $43.07 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.
The 1.0% yield is low for a real estate company — investors are paying up because they expect above-average growth.
Dividend-based valuation: $6.35 (85% below our primary estimate). Large gaps suggest the dividend may not fully reflect the company's value.
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