SUI
Sun Communities, Inc.
$118.86
Real Estate Investment Trust
85%
P/FFO × Residential REIT Multiple
Strong
·
Conviction
Undervalued
Trading 61.3% below fair value
You pay
$118.86
Bear
$259.08
Fair
$307.28
Bull
$355.48
Bear
$259.08
+118.0%
$15.45 FFO × 21x
Fair
$307.28
+158.5%
$15.45 FFO × 25x
Bull
$355.48
+199.1%
$15.45 FFO × 29x
Adjust Assumptions
24.7x
$
Key Value Driver
FFO/share ($15.45) × residential P/FFO multiple
Implied Market Multiple
7.7x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (21 analysts)
$136.36
Divergence from AlphaVal
125%
Summary
At $15.45 FFO/share with a 25x residential REIT multiple, the base-case value is $307.28 per share. Dividend yield: 3.7%. DDM cross-check: $133.90.
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: $133.90 (56% below our primary estimate). Large gaps suggest the dividend may not fully reflect the company's value.
Wall Street's average price target is $136.36 (from 21 analysts). Our estimate is 125% 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