UDR
UDR, Inc.
$33.84
Real Estate Investment Trust
85%
P/FFO × Residential REIT Multiple
Strong
·
Conviction
Undervalued
Trading 45.2% below fair value
You pay
$33.84
Bear
$52.07
Fair
$61.79
Bull
$71.51
Bear
$52.07
+53.9%
$3.29 FFO × 21x
Fair
$61.79
+82.6%
$3.29 FFO × 25x
Bull
$71.51
+111.3%
$3.29 FFO × 29x
Adjust Assumptions
24.7x
$
Key Value Driver
FFO/share ($3.29) × residential P/FFO multiple
Implied Market Multiple
10.3x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (38 analysts)
$41.60
Divergence from AlphaVal
49%
Summary
At $3.29 FFO/share with a 25x residential REIT multiple, the base-case value is $61.79 per share. Dividend yield: 2.6%. DDM cross-check: $16.21.
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 $41.60 (from 38 analysts). Our estimate is 49% 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