PSA
Public Storage
$329.44
Real Estate Investment Trust
85%
P/FFO × Industrial REIT Multiple
Mild
·
Conviction
Fair Value
Trading 1.9% below fair value
You pay
$329.44
Bear
$276.88
Fair
$335.84
Bull
$394.80
Bear
$276.88
-16.0%
$15.75 FFO × 20x
Fair
$335.84
+1.9%
$15.75 FFO × 25x
Bull
$394.80
+19.8%
$15.75 FFO × 29x
Key Value Driver
FFO/share ($15.75) × industrial P/FFO multiple
Implied Market Multiple
20.9x
Summary
Our base-case estimate uses P/FFO × Industrial REIT Multiple. We then blend that result with the average analyst price target of $323.60 from 36 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $335.84 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 (34% 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