UE
Urban Edge Properties
$23.70
Real Estate Investment Trust
85%
P/FFO × Diversified REIT Multiple
Moderate
·
Conviction
Fair Value
Trading 21.0% below fair value
You pay
$23.70
Bear
$24.72
Fair
$30.01
Bull
$35.31
Bear
$24.72
+4.3%
$1.85 FFO × 14x
Fair
$30.01
+26.6%
$1.85 FFO × 17x
Bull
$35.31
+49.0%
$1.85 FFO × 20x
Key Value Driver
FFO/share ($1.85) × diversified P/FFO multiple
Implied Market Multiple
12.8x
Summary
Our base-case estimate uses P/FFO × Diversified REIT Multiple. We then blend that result with the average analyst price target of $24.50 from 7 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $30.01 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.
Wall Street's average price target is $24.50 (from 7 analysts). Our estimate is 28% 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