SAFE
Safehold Inc.
$14.03
Real Estate Investment Trust
85%
P/FFO × Diversified REIT Multiple
Strong
·
Conviction
Undervalued
Trading 63.0% below fair value
You pay
$14.03
Bear
$31.26
Fair
$37.96
Bull
$44.66
Bear
$31.26
+122.8%
$1.72 FFO × 18x
Fair
$37.96
+170.6%
$1.72 FFO × 22x
Bull
$44.66
+218.3%
$1.72 FFO × 26x
Adjust Assumptions
22.1x
$
Key Value Driver
FFO/share ($1.72) × diversified P/FFO multiple
Implied Market Multiple
8.2x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (17 analysts)
$16.00
Divergence from AlphaVal
137%
Summary
At $1.72 FFO/share with a 22x diversified REIT multiple, the base-case value is $37.96 per share. Dividend yield: 5.0%.
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 5.0% is unusually high — make sure the company generates enough cash to keep paying it.
Wall Street's average price target is $16.00 (from 17 analysts). Our estimate is 137% 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