SUI
Sun Communities, Inc.
$121.46
Real Estate Investment Trust
85%
P/FFO × Residential REIT Multiple
Strong
·
Conviction
Undervalued
Trading 53.7% below fair value
You pay
$121.46
Bear
$221.09
Fair
$262.23
Bull
$303.37
Bear
$221.09
+82.0%
$15.27 FFO × 21x
Fair
$262.23
+115.9%
$15.27 FFO × 25x
Bull
$303.37
+149.8%
$15.27 FFO × 29x
Key Value Driver
FFO/share ($15.27) × residential P/FFO multiple
Implied Market Multiple
8.0x
Summary
Our base-case estimate uses P/FFO × Residential REIT Multiple. We then blend that result with the average analyst price target of $141.50 from 21 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $262.23 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.
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 $141.50 (from 21 analysts). Our estimate is 114% 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