WELL
Welltower Inc.
$241.08
Real Estate Investment Trust
85%
P/FFO × Healthcare REIT Multiple
Strong
·
Conviction
Overvalued
Trading 67.1% above fair value
You pay
$241.08
Bear
$112.25
Fair
$144.31
Bull
$176.39
Bear
$112.25
-53.4%
$4.36 FFO × 18x
Fair
$144.31
-40.1%
$4.36 FFO × 23x
Bull
$176.39
-26.8%
$4.36 FFO × 29x
Key Value Driver
FFO/share ($4.36) × healthcare P/FFO multiple
Implied Market Multiple
55.3x
Summary
Our base-case estimate uses P/FFO × Healthcare REIT Multiple. We then blend that result with the average analyst price target of $243.18 from 35 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $144.31 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 1.3% 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 $243.18 (from 35 analysts). Our estimate is 58% 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