PSA
Public Storage
$325.94
Real Estate Investment Trust
85%
P/FFO × Industrial REIT Multiple
Mild
·
Conviction
Fair Value
Trading 5.4% below fair value
You pay
$325.94
Bear
$284.08
Fair
$344.69
Bull
$405.32
Bear
$284.08
-12.8%
$16.73 FFO × 20x
Fair
$344.69
+5.8%
$16.73 FFO × 25x
Bull
$405.32
+24.4%
$16.73 FFO × 29x
Key Value Driver
FFO/share ($16.73) × industrial P/FFO multiple
Implied Market Multiple
19.5x
Summary
Our base-case estimate uses P/FFO × Industrial REIT Multiple. We then blend that result with the average analyst price target of $313.30 from 36 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $344.69 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-based valuation: $223.64 (38% 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