WELL
Welltower Inc.
$230.80
Real Estate Investment Trust
85%
P/FFO × Healthcare REIT Multiple
Strong
·
Conviction
Overvalued
Trading 131.1% above fair value
You pay
$230.80
Bear
$77.68
Fair
$99.87
Bull
$122.06
Bear
$77.68
-66.3%
$4.27 FFO × 18x
Fair
$99.87
-56.7%
$4.27 FFO × 23x
Bull
$122.06
-47.1%
$4.27 FFO × 29x
Adjust Assumptions
23.4x
$
Key Value Driver
FFO/share ($4.27) × healthcare P/FFO multiple
Implied Market Multiple
54.1x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (35 analysts)
$258.08
Divergence from AlphaVal
61%
Summary
At $4.27 FFO/share with a 23x healthcare REIT multiple, the base-case value is $99.87 per share. Dividend yield: 1.3%. DDM cross-check: $97.42.
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 1.3% yield is low for a real estate company — investors are paying up because they expect above-average growth.
Wall Street's average price target is $258.08 (from 35 analysts). Our estimate is 61% 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