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Regency Centers Corporation (REG) Intrinsic Value

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

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Regency Centers Corporation (REG)

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Intrinsic Value (DCF)

Current$69.85
→
Intrinsic$49.81
-29%
$25.52$49.81$95.97
Market implies 14% growth for 5 years
REG trades at a premium to our conservative estimate — investors expect above-average performance.
At $70, the market prices in 14% annual cash flow growth — a moderate expectation aligned with historical trends (8%).
Range: Bear $26 → Bull $96. Current price implies expectations above the base case, closer to bull expectations.
Discount ↓Growth →4%6%8%10%
8%$64$72$81$91
10%$38$44$50$56
12%$23$28$32$37
14%$14$18$21$25

Bull Case

  • Bull case ($96) offers 37% upside at 10% growth, 9% discount
  • Conservative 8% growth assumption is achievable based on track record

Bear Case

  • Bear case ($26) implies 63% downside at 6% growth, 12% discount
  • Price reflects 14% growth expectations vs 8% historical — high bar to clear
  • Trading 29% above base case — execution must exceed assumptions to justify
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5-Year FFO Projection

Year 1$834.90M
Year 2$902.45M
Year 3$975.46M
Year 4$1.05B
Year 5$1.14B
Terminal$16.77B

📐 Model Inputs

Growth Rate8.1%5Y CAGR (cascade: 5Y→3Y→TTM)
Discount Rate10.0%WACC estimate
Terminal Growth3.0%Perpetuity rate
Base FFO$772.40MTTM 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 REG stock undervalued or overvalued?
🔴 OVERVALUED

REG trades at $69.85 vs. our DCF-derived intrinsic value of $49.81, implying -28% downside. Using a 10.0% WACC and 8.1% FCF growth assumption, the current price requires growth rates above our estimates to be justified. Even our bull case ($78.24) suggests limited upside.

What is REG's intrinsic value?

Using a 5-year DCF model: Base FCF of $772M, projected at 8.1% 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 $4.96B net debt and dividing by 0.18B shares: Bear $28.56 | Base $49.81 | Bull $78.24. Current price $69.85 implies -28% to base case.

How is REG's fair value calculated?

DCF Methodology:

① Project FCF years 1-5 using 8.1% 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 ($14.08B).

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: 18.2x.