TRNO
Terreno Realty Corporation
$72.99
Real Estate Investment Trust
85%
P/FFO × Industrial REIT Multiple
Moderate
·
Conviction
Undervalued
Trading 39.8% below fair value
You pay
$72.99
Bear
$99.13
Fair
$121.16
Bull
$143.19
Bear
$99.13
+35.8%
$4.93 FFO × 23x
Fair
$121.16
+66.0%
$4.93 FFO × 29x
Bull
$143.19
+96.2%
$4.93 FFO × 34x
Key Value Driver
FFO/share ($4.93) × industrial P/FFO multiple
Implied Market Multiple
14.8x
Summary
Our base-case estimate uses P/FFO × Industrial REIT Multiple. We then blend that result with the average analyst price target of $74.56 from 32 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $121.16 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 $74.56 (from 32 analysts). Our estimate is 89% 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