TRTX
TPG RE Finance Trust, Inc.
$5.67
Real Estate Investment Trust
85%
P/FFO × Default REIT Multiple
Strong
·
Conviction
Undervalued
Trading 73.0% below fair value
You pay
$5.67
Bear
$17.32
Fair
$21.03
Bull
$24.74
Bear
$17.32
+205.1%
$0.95 FFO × 18x
Fair
$21.03
+270.5%
$0.95 FFO × 22x
Bull
$24.74
+335.9%
$0.95 FFO × 26x
Adjust Assumptions
22.1x
$
Key Value Driver
FFO/share ($0.95) × default P/FFO multiple
Implied Market Multiple
6.0x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (11 analysts)
$11.38
Divergence from AlphaVal
85%
Summary
At $0.95 FFO/share with a 22x default REIT multiple, the base-case value is $21.03 per share. Dividend yield: 16.9%. DDM cross-check: $17.89.
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 yield of 16.9% is unusually high — make sure the company generates enough cash to keep paying it.
Wall Street's average price target is $11.38 (from 11 analysts). Our estimate is 85% 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