VTR
Ventas, Inc.
$86.31
Real Estate Investment Trust
85%
P/FFO × Healthcare REIT Multiple
Strong
·
Conviction
Overvalued
Trading 54.7% above fair value
You pay
$86.31
Bear
$44.24
Fair
$55.81
Bull
$67.38
Bear
$44.24
-48.7%
$3.35 FFO × 15x
Fair
$55.81
-35.3%
$3.35 FFO × 19x
Bull
$67.38
-21.9%
$3.35 FFO × 23x
Adjust Assumptions
18.9x
$
Key Value Driver
FFO/share ($3.35) × healthcare P/FFO multiple
Implied Market Multiple
25.7x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (32 analysts)
$99.93
Divergence from AlphaVal
44%
Summary
At $3.35 FFO/share with a 19x healthcare REIT multiple, the base-case value is $55.81 per share. Dividend yield: 2.4%. DDM cross-check: $38.27.
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: $38.27 (31% below our primary estimate). Large gaps suggest the dividend may not fully reflect the company's value.
Wall Street's average price target is $99.93 (from 32 analysts). Our estimate is 44% 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