SUI
Sun Communities, Inc.
$119.44
Real Estate Investment Trust
85%
P/FFO × Residential REIT Multiple
Strong
·
Conviction
Undervalued
Trading 60.5% below fair value
You pay
$119.44
Bear
$255.02
Fair
$302.47
Bull
$349.93
Bear
$255.02
+113.5%
$15.27 FFO × 21x
Fair
$302.47
+153.2%
$15.27 FFO × 25x
Bull
$349.93
+193.0%
$15.27 FFO × 29x
Adjust Assumptions
24.7x
$
Key Value Driver
FFO/share ($15.27) × residential P/FFO multiple
Implied Market Multiple
7.8x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (21 analysts)
$139.80
Divergence from AlphaVal
116%
Summary
At $15.27 FFO/share with a 25x residential REIT multiple, the base-case value is $302.47 per share. Dividend yield: 3.6%. DDM cross-check: $128.20.
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: $128.20 (58% below our primary estimate). Large gaps suggest the dividend may not fully reflect the company's value.
Wall Street's average price target is $139.80 (from 21 analysts). Our estimate is 116% 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