RYN
Rayonier Inc. REIT
$18.65
Real Estate Investment Trust
85%
P/FFO × Specialty REIT Multiple
Strong
·
Conviction
Undervalued
Trading 60.8% below fair value
You pay
$18.65
Bear
$38.93
Fair
$47.52
Bull
$56.12
Bear
$38.93
+108.7%
$1.98 FFO × 24x
Fair
$47.52
+154.8%
$1.98 FFO × 30x
Bull
$56.12
+200.9%
$1.98 FFO × 36x
Adjust Assumptions
30.1x
$
Key Value Driver
FFO/share ($1.98) × specialty P/FFO multiple
Implied Market Multiple
9.4x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (27 analysts)
$24.75
Divergence from AlphaVal
92%
Summary
At $1.98 FFO/share with a 30x specialty REIT multiple, the base-case value is $47.52 per share. Dividend yield: 5.6%. DDM cross-check: $19.38.
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 5.6% is unusually high — make sure the company generates enough cash to keep paying it.
Dividend-based valuation: $19.38 (59% below our primary estimate). Large gaps suggest the dividend may not fully reflect the company's value.
Wall Street's average price target is $24.75 (from 27 analysts). Our estimate is 92% above 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