Two Harbors Investment Corp. logo TWO - Two Harbors Investment Corp.

Price: -- -- | CONSENSUS: Hold DETAILS
STRONG
BUY 0
BUY 4
HOLD 17
SELL 1
STRONG
SELL 0
| PRICE TARGET: $13.50 DETAILS
HIGH: $14.00
LOW: $13.00
MEDIAN: $13.50
CONSENSUS: $13.50
UPSIDE: 11.75%
AlphaVal

AlphaVal

Deterministic, archetype-aware fair value

Real Estate Investment Trust 85% confidence

Primary model: P/FFO × Default REIT Multiple

Valuation Signal Fair Value Mild
Trading 14.7% below fair value
Current Price $12.08
Bear Case $11.67 3.4% downside ($11.67 - $12.08) / $12.08 = -3.4% $0.85 FFO × 14x
Fair Value $14.17 17.3% upside ($14.17 - $12.08) / $12.08 = 17.3% $0.85 FFO × 17x
Bull Case $16.67 38.0% upside ($16.67 - $12.08) / $12.08 = 38.0% $0.85 FFO × 20x

Adjust Assumptions

17.0x
0.85$

Key Value Driver

FFO/share ($0.85) × default P/FFO multiple

Implied Market Multiple 14.3x

Plain-Language Summary

Our base-case estimate uses P/FFO × Default REIT Multiple. We then blend that result with the average analyst price target of $13.50 from 22 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $14.17 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 yield of 11.3% is unusually high — make sure the company generates enough cash to keep paying it.

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