PK
Park Hotels & Resorts Inc.
$14.88
Real Estate Investment Trust
85%
P/FFO × Default REIT Multiple
Strong
·
Conviction
Overvalued
Trading 41.8% above fair value
You pay
$14.88
Bear
$8.81
Fair
$10.50
Bull
$12.19
Bear
$8.81
-40.8%
$0.26 FFO × 18x
Fair
$10.50
-29.5%
$0.26 FFO × 22x
Bull
$12.19
-18.1%
$0.26 FFO × 26x
Key Value Driver
FFO/share ($0.26) × default P/FFO multiple
Implied Market Multiple
56.5x
Summary
Our base-case estimate uses P/FFO × Default REIT Multiple. We then blend that result with the average analyst price target of $13.00 from 26 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $10.50 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 6.7% is unusually high — make sure the company generates enough cash to keep paying it.
Dividend-based valuation: $18.64 (93% above our primary estimate). Large gaps suggest the dividend may not fully reflect the company's value.
Wall Street's average price target is $13.00 (from 26 analysts). Our estimate is 26% below 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