VRE
Veris Residential, Inc.
$19.00
Real Estate Investment Trust
85%
P/FFO × Residential REIT Multiple
Moderate
·
Conviction
Undervalued
Trading 32.2% below fair value
You pay
$19.00
Bear
$23.62
Fair
$28.04
Bull
$32.45
Bear
$23.62
+24.3%
$1.72 FFO × 21x
Fair
$28.04
+47.6%
$1.72 FFO × 25x
Bull
$32.45
+70.8%
$1.72 FFO × 29x
Key Value Driver
FFO/share ($1.72) × residential P/FFO multiple
Implied Market Multiple
11.0x
Summary
Our base-case estimate uses P/FFO × Residential REIT Multiple. We then blend that result with the average analyst price target of $14.00 from 12 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $28.04 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.
The 1.7% yield is low for a real estate company — investors are paying up because they expect above-average growth.
Dividend-based valuation: $5.96 (81% below our primary estimate). Large gaps suggest the dividend may not fully reflect the company's value.
Wall Street's average price target is $14.00 (from 12 analysts). Our estimate is 125% 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