UDR
UDR, Inc.
$37.66
Real Estate Investment Trust
85%
P/FFO × Residential REIT Multiple
Moderate
·
Conviction
Undervalued
Trading 32.6% below fair value
You pay
$37.66
Bear
$47.10
Fair
$55.89
Bull
$64.68
Bear
$47.10
+25.1%
$3.29 FFO × 21x
Fair
$55.89
+48.4%
$3.29 FFO × 25x
Bull
$64.68
+71.8%
$3.29 FFO × 29x
Key Value Driver
FFO/share ($3.29) × residential P/FFO multiple
Implied Market Multiple
11.4x
Summary
Our base-case estimate uses P/FFO × Residential REIT Multiple. We then blend that result with the average analyst price target of $42.13 from 38 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $55.89 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: $16.21 (74% below our primary estimate). Large gaps suggest the dividend may not fully reflect the company's value.
Wall Street's average price target is $42.13 (from 38 analysts). Our estimate is 47% 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