- If you are wondering whether First Industrial Realty Trust at around US$58.06 is offering fair value or not, this article walks through what the current data suggests about the price you see on screen.
- The stock has recently been mixed, with a 4.8% decline over the last 7 days and a 6.5% decline over 30 days, even though returns stand at 0.3% year to date and 10.7% over 1 year, 24.3% over 3 years, and 42.2% over 5 years.
- Recent news flow around First Industrial Realty Trust has focused on its position within industrial real estate and how investors are assessing the sector, which helps frame these ups and downs in the share price. This context matters because sentiment around industrial properties and listed real estate investment trusts can influence how the stock trades even when company specific headlines are limited.
- Simply Wall St currently gives the company a valuation score of 2 out of 6. Next, you will see how different methods such as multiples and discounted cash flow assess the shares, and then finish with a broader way to think about valuation that may give an even clearer picture.
First Industrial Realty Trust scores just 2/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.
Approach 1: First Industrial Realty Trust Discounted Cash Flow (DCF) Analysis
A Discounted Cash Flow, or DCF, model estimates what a stock could be worth by projecting its future adjusted funds from operations and then discounting those cash flows back to today in dollar terms.
For First Industrial Realty Trust, the model used is a 2 Stage Free Cash Flow to Equity approach based on adjusted funds from operations. The latest twelve month free cash flow is about $333.47 million. Analyst inputs are used for the next few years, then Simply Wall St extrapolates further out, with projected free cash flow of $541.1 million in 2030. Each of these future cash flows is discounted back to today to reflect the time value of money and risk.
Pulling this together, the DCF model suggests an estimated intrinsic value of about $67.30 per share. Compared with the recent share price of around $58.06, this implies that the stock trades at roughly a 13.7% discount. On this model alone, the shares appear to be undervalued.
Result: UNDERVALUED
Our Discounted Cash Flow (DCF) analysis suggests First Industrial Realty Trust is undervalued by 13.7%. Track this in your watchlist or portfolio, or discover 55 more high quality undervalued stocks.
Approach 2: First Industrial Realty Trust Price vs Earnings
For profitable companies, the P/E ratio is a useful way to gauge how much you are paying for each dollar of current earnings. This makes it a common starting point when you are comparing listed real estate businesses.
What counts as a “normal” or “fair” P/E often reflects how the market views a company’s growth outlook and risk. Higher growth and lower perceived risk typically support higher multiples, while slower growth or higher risk tend to point to lower ones.
First Industrial Realty Trust currently trades on a P/E of 31.11x. This sits above the Industrial REITs industry average of 17.03x and also above the peer group average of 29.97x. On simple comparisons, the shares look relatively expensive versus both its sector and peers.
Simply Wall St’s Fair Ratio for First Industrial Realty Trust is 33.93x. This is a proprietary estimate of what the P/E might be given factors such as the company’s earnings growth profile, industry, profit margins, market cap and risk characteristics. Because it blends these company specific drivers, it can be more tailored than a straight comparison with industry or peer averages, which may include businesses with very different growth or risk profiles.
Comparing the Fair Ratio of 33.93x with the current P/E of 31.11x suggests the shares are trading below that Fair Ratio.
Result: UNDERVALUED
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Upgrade Your Decision Making: Choose your First Industrial Realty Trust Narrative
Earlier it was mentioned that there is an even better way to understand valuation. Narratives on Simply Wall St’s Community page let you link your view of First Industrial Realty Trust’s story to a set of numbers by pairing your assumptions for revenue, earnings, margins and fair value with the current price. This view is then updated automatically when new news or earnings arrive. This means two investors can look at the same situation, such as one Narrative using the higher analyst price target of US$64.0 and another using the lower target of US$52.0, and reach different buy or sell decisions based on how each person’s fair value compares to the market price.
Do you think there's more to the story for First Industrial Realty Trust? Head over to our Community to see what others are saying!
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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