UE
Urban Edge Properties
$22.28
Real Estate Investment Trust
85%
P/FFO × Diversified REIT Multiple
Moderate
·
Conviction
Fair Value
Trading 24.5% below fair value
You pay
$22.28
Bear
$24.30
Fair
$29.51
Bull
$34.72
Bear
$24.30
+9.1%
$1.85 FFO × 14x
Fair
$29.51
+32.5%
$1.85 FFO × 17x
Bull
$34.72
+55.8%
$1.85 FFO × 20x
Key Value Driver
FFO/share ($1.85) × diversified P/FFO multiple
Implied Market Multiple
12.1x
Summary
Our base-case estimate uses P/FFO × Diversified REIT Multiple. We then blend that result with the average analyst price target of $22.00 from 7 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $29.51 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 $22.00 (from 7 analysts). Our estimate is 43% 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