STAG
STAG Industrial, Inc.
$41.82
Real Estate Investment Trust
85%
P/FFO × Industrial REIT Multiple
Strong
·
Conviction
Undervalued
Trading 44.3% below fair value
You pay
$41.82
Bear
$61.44
Fair
$75.10
Bull
$88.75
Bear
$61.44
+46.9%
$3.01 FFO × 23x
Fair
$75.10
+79.6%
$3.01 FFO × 29x
Bull
$88.75
+112.2%
$3.01 FFO × 34x
Key Value Driver
FFO/share ($3.01) × industrial P/FFO multiple
Implied Market Multiple
13.9x
Summary
Our base-case estimate uses P/FFO × Industrial REIT Multiple. We then blend that result with the average analyst price target of $42.25 from 21 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $75.10 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.
Wall Street's average price target is $42.25 (from 21 analysts). Our estimate is 104% 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