TRNO
Terreno Realty Corporation
$64.06
Real Estate Investment Trust
85%
P/FFO × Industrial REIT Multiple
Strong
·
Conviction
Undervalued
Trading 53.5% below fair value
You pay
$64.06
Bear
$112.65
Fair
$137.68
Bull
$162.71
Bear
$112.65
+75.8%
$4.81 FFO × 23x
Fair
$137.68
+114.9%
$4.81 FFO × 29x
Bull
$162.71
+154.0%
$4.81 FFO × 34x
Adjust Assumptions
28.6x
$
Key Value Driver
FFO/share ($4.81) × industrial P/FFO multiple
Implied Market Multiple
13.3x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (32 analysts)
$73.92
Divergence from AlphaVal
86%
Summary
At $4.81 FFO/share with a 29x industrial REIT multiple, the base-case value is $137.68 per share. Dividend yield: 3.3%.
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 $73.92 (from 32 analysts). Our estimate is 86% 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