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Federal Realty Investment Trust (FRT) Intrinsic Value

DCF-based fair value calculation with Bear, Base, and Bull scenarios

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Federal Realty Investment Trust (FRT)

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Intrinsic Value (DCF)

Current$101.80
→
Intrinsic$106.95
+5%
$56.24$106.95$203.33
Market implies 11% growth for 5 years
FRT appears fairly valued — current price aligns with our DCF estimate.
At $102, the market prices in 11% annual cash flow growth — a moderate expectation aligned with historical trends (12%).
Range: Bear $56 → Bull $203. Current price implies expectations near the base case.
Discount ↓Growth →8%10%12%14%
8%$138$155$174$193
10%$83$94$107$120
12%$52$61$70$80
14%$32$39$47$55

Bull Case

  • Bull case ($203) offers 100% upside at 14% growth, 9% discount
  • 5% margin of safety vs. base case estimate
  • Market-implied growth (11%) ≤ historical CAGR (12%)

Bear Case

  • Bear case ($56) implies 45% downside at 9% growth, 12% discount
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5-Year FFO Projection

Year 1$711.29M
Year 2$793.23M
Year 3$884.62M
Year 4$986.54M
Year 5$1.10B
Terminal$16.19B

📐 Model Inputs

Growth Rate11.5%5Y CAGR (cascade: 5Y→3Y→TTM)
Discount Rate10.0%WACC estimate
Terminal Growth3.0%Perpetuity rate
Base FFO$637.81MTTM actual
Bear g×0.8, r+2%
Base Historical CAGR
Bull g×1.2, r−1.5%
ℹ️

DCF estimates based on historical growth rates extrapolated forward. Uses FFO per NAREIT standards. See FAQ below for full methodology.

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Frequently Asked Questions

Is FRT stock undervalued or overvalued?
🟡 FAIRLY VALUED

FRT trades at $101.80, within 10% of our $106.95 intrinsic value estimate. At 10.0% WACC and 11.5% FCF growth, the market is pricing in assumptions roughly aligned with the 5-year historical CAGR. The valuation range spans $59.32 (bear) to $172.68 (bull).

What is FRT's intrinsic value?

Using a 5-year DCF model: Base FCF of $638M, projected at 11.5% 5Y CAGR (best of revenue, EPS, or FCF growth), discounted at 10.0% WACC, with 3.0% terminal growth. Terminal value calculated via Gordon Growth Model: TV = FCF₅ × (1+g) / (WACC−g). After deducting $4.44B net debt and dividing by 0.08B shares: Bear $59.32 | Base $106.95 | Bull $172.68. Current price $101.80 implies +6% to base case.

How is FRT's fair value calculated?

DCF Methodology:

① Project FCF years 1-5 using 11.5% growth derived from 5-year historical CAGR (best of revenue, EPS, or FCF growth, with 8% floor and 25% cap).

② Calculate terminal value at year 5 using perpetuity growth model with g=3.0%.

③ Discount all cash flows to PV using WACC=10.0%.

④ Sum PV of explicit period + PV of terminal value = Enterprise Value ($13.38B).

⑤ Subtract net debt, divide by shares outstanding.

Sensitivity analysis available above—adjust WACC ±2% or growth ±3% to stress-test the valuation. Implied EV/FCF multiple: 21.0x.