VTR
Ventas, Inc.
$84.60
Real Estate Investment Trust
85%
P/FFO × Healthcare REIT Multiple
Moderate
·
Conviction
Overvalued
Trading 25.9% above fair value
You pay
$84.60
Bear
$53.20
Fair
$67.21
Bull
$81.22
Bear
$53.20
-37.1%
$3.35 FFO × 15x
Fair
$67.21
-20.6%
$3.35 FFO × 19x
Bull
$81.22
-4.0%
$3.35 FFO × 23x
Key Value Driver
FFO/share ($3.35) × healthcare P/FFO multiple
Implied Market Multiple
25.2x
Summary
Our base-case estimate uses P/FFO × Healthcare REIT Multiple. We then blend that result with the average analyst price target of $96.25 from 32 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $67.21 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: $34.79 (36% below our primary estimate). Large gaps suggest the dividend may not fully reflect the company's value.
Wall Street's average price target is $96.25 (from 32 analysts). Our estimate is 43% below 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