SUI
Sun Communities, Inc.
$127.75
Real Estate Investment Trust
85%
P/FFO × Residential REIT Multiple
Strong
·
Conviction
Undervalued
Trading 51.1% below fair value
You pay
$127.75
Bear
$220.11
Fair
$261.08
Bull
$302.05
Bear
$220.11
+72.3%
$15.27 FFO × 21x
Fair
$261.08
+104.4%
$15.27 FFO × 25x
Bull
$302.05
+136.4%
$15.27 FFO × 29x
Key Value Driver
FFO/share ($15.27) × residential P/FFO multiple
Implied Market Multiple
8.4x
Summary
Our base-case estimate uses P/FFO × Residential REIT Multiple. We then blend that result with the average analyst price target of $141.86 from 20 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $261.08 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: $122.68 (59% below our primary estimate). Large gaps suggest the dividend may not fully reflect the company's value.
Wall Street's average price target is $141.86 (from 20 analysts). Our estimate is 112% 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