SAFE
Safehold Inc.
$11.15
Real Estate Investment Trust
85%
P/FFO × Diversified REIT Multiple
Strong
·
Conviction
Undervalued
Trading 71.5% below fair value
You pay
$11.15
Bear
$32.21
Fair
$39.11
Bull
$46.01
Bear
$32.21
+188.9%
$1.77 FFO × 18x
Fair
$39.11
+250.8%
$1.77 FFO × 22x
Bull
$46.01
+312.7%
$1.77 FFO × 26x
Adjust Assumptions
22.1x
$
Key Value Driver
FFO/share ($1.77) × diversified P/FFO multiple
Implied Market Multiple
6.3x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (18 analysts)
$15.67
Divergence from AlphaVal
150%
Summary
At $1.77 FFO/share with a 22x diversified REIT multiple, the base-case value is $39.11 per share. Dividend yield: 6.3%.
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 6.3% is unusually high — make sure the company generates enough cash to keep paying it.
Wall Street's average price target is $15.67 (from 18 analysts). Our estimate is 150% 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