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W. P. Carey Inc. (WPC) Intrinsic Value

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

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W. P. Carey Inc. (WPC)

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Intrinsic Value (DCF)

Current$68.92
→
Intrinsic$45.96
-33%
$20.65$45.96$94.08
Market implies 14% growth for 5 years
Current price reflects execution expectations above 8% growth — not unreasonable for quality businesses.
At $69, the market prices in 14% annual cash flow growth — a moderate expectation aligned with historical trends (8%).
Range: Bear $21 → Bull $94. Current price implies expectations above the base case, closer to bull expectations.
Discount ↓Growth →4%6%8%10%
8%$61$70$79$89
10%$34$40$46$53
12%$18$23$28$33
14%$9$12$16$20

Bull Case

  • Bull case ($94) offers 37% upside at 10% growth, 9% discount
  • Conservative 8% growth assumption is achievable based on track record

Bear Case

  • Bear case ($21) implies 70% downside at 6% growth, 12% discount
  • Price reflects 14% growth expectations vs 8% historical — high bar to clear
  • Trading 33% above base case — execution must exceed assumptions to justify
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5-Year FFO Projection

Year 1$1.05B
Year 2$1.14B
Year 3$1.23B
Year 4$1.32B
Year 5$1.43B
Terminal$21.05B

📐 Model Inputs

Growth Rate8.0%5Y CAGR (cascade: 5Y→3Y→TTM)
Discount Rate10.0%WACC estimate
Terminal Growth3.0%Perpetuity rate
Base FFO$973.57MTTM 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 WPC stock undervalued or overvalued?
🔴 OVERVALUED

WPC trades at $68.92 vs. our DCF-derived intrinsic value of $45.96, implying -29% downside. Using a 10.0% WACC and 8.0% FCF growth assumption, the current price requires growth rates above our estimates to be justified. Even our bull case ($75.51) suggests limited upside.

What is WPC's intrinsic value?

Using a 5-year DCF model: Base FCF of $974M, projected at 8.0% 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 $7.54B net debt and dividing by 0.22B shares: Bear $23.87 | Base $45.96 | Bull $75.51. Current price $68.92 implies -29% to base case.

How is WPC's fair value calculated?

DCF Methodology:

① Project FCF years 1-5 using 8.0% 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 ($17.68B).

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.