UDR
UDR, Inc.
$39.10
Real Estate Investment Trust
85%
P/FFO × Residential REIT Multiple
Moderate
·
Conviction
Undervalued
Trading 28.5% below fair value
You pay
$39.10
Bear
$46.06
Fair
$54.66
Bull
$63.25
Bear
$46.06
+17.8%
$3.26 FFO × 21x
Fair
$54.66
+39.8%
$3.26 FFO × 25x
Bull
$63.25
+61.8%
$3.26 FFO × 29x
Key Value Driver
FFO/share ($3.26) × residential P/FFO multiple
Implied Market Multiple
12.0x
Summary
Our base-case estimate uses P/FFO × Residential REIT Multiple. We then blend that result with the average analyst price target of $39.50 from 38 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $54.66 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 (73% below our primary estimate). Large gaps suggest the dividend may not fully reflect the company's value.
Wall Street's average price target is $39.50 (from 38 analysts). Our estimate is 55% 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