PSA
Public Storage
$287.71
Real Estate Investment Trust
85%
P/FFO × Industrial REIT Multiple
Moderate
·
Conviction
Fair Value
Trading 15.7% below fair value
You pay
$287.71
Bear
$281.21
Fair
$341.09
Bull
$400.97
Bear
$281.21
-2.3%
$15.75 FFO × 20x
Fair
$341.09
+18.6%
$15.75 FFO × 25x
Bull
$400.97
+39.4%
$15.75 FFO × 29x
Adjust Assumptions
24.9x
$
Key Value Driver
FFO/share ($15.75) × industrial P/FFO multiple
Implied Market Multiple
18.3x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (36 analysts)
$328.33
Divergence from AlphaVal
4%
Summary
At $15.75 FFO/share with a 25x industrial REIT multiple, the base-case value is $341.09 per share. Dividend yield: 4.2%. DDM cross-check: $223.64.
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