Agree Realty Corporation (ADC): what the price requires
At today's price, Agree Realty Corporation (ADC) is priced for +1.6% FFO growth. boothcheck doesn't publish a fair value or a price target; it shows what the price assumes, so you can judge whether that bar is too high.
Generated: 2026-07-19 · Source: https://boothcheck.com/report/ADC
Headline
| Field | Value |
|---|---|
| Ticker | ADC |
| Company | Agree Realty Corporation |
| Current price | $78.53/sh |
What The Price Requires (Inversion)
The assumption today's price embeds, recovered by inverting the valuation.
| Field | Value |
|---|---|
| Inversion basis | reit |
| Implied FFO growth | 1.6% |
| Price-to-FFO | 21.1x |
| FFO yield | 4.8% |
Solve inputs: computed at a 8.2% cost of equity with 4% terminal growth over a 5-year stage; each 1pp of cost of equity moves the implied growth ~5.2pp.
Reconcile: at the x-ray's 9.3% required return this reads ~6.5%/yr; the models below use their own rates.
How unusual the bet is: within-range
| Reference | Value |
|---|---|
| vs own history | -1.62σ |
| cohort percentile (of 88 peers) | 82 |
| implied end-window share | 0% |
Valuation X-Ray
Every valuation family lands below the price. The price therefore requires assumptions beyond what those standard frames encode.
How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.
| Family | Median price/FV | Models | Reads |
|---|---|---|---|
| Asset | 6.46x | 5 | expensive |
| Earnings | 1.72x | 5 | expensive |
| Relative | 1.62x | 6 | expensive |
| Growth | 1.38x | 5 | expensive |
Families that call it expensive: Asset, Earnings, Relative
The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 9.2%); the inversion above states its own rate.
Per-Model Detail (n=21)
| Model | Family | FV | Price/FV | Applicable | Methodology |
|---|---|---|---|---|---|
| DCF Perpetual Growth | Growth | $75.63 | 1.04x | yes | FCF base $0.6B, growth 17% (input: historical growth), terminal g 4.0%, WACC 9.2%, 6yr projection |
| DCF Exit Multiple | Growth | $60.92 | 1.29x | yes | Exit EV/EBITDA: 13.5x / 15.5x / 17.5x (bear / base = today's held flat / bull), 6yr |
| Relative Valuation | Relative | $117.85 | 0.67x | yes | P/E 35x (static sector reference · 2026-04), scenarios: 28.6x / 35.0x / 41.4x (bear / base = reference held flat / bull), EV/EBITDA 20x |
| Simple DDM | Growth | $56.96 | 1.38x | yes | DPS $3.15, g=3.5% (sustainable: ROE (TTM) × retention; not the terminal-growth assumption), ke=9.3% |
| Two-Stage DDM | Growth | $55.95 | 1.40x | yes | Stage 1: 3% for 5yr, Stage 2: 3.5% perpetual |
| Simple Excess Return | Asset | $19.70 | 3.99x | yes | BV/sh $51.83, ROE (TTM) 3.5%, ke 9.3% |
| Two-Stage Excess Return | Asset | $12.16 | 6.46x | yes | 5yr excess ROE then converge to ke=9.3% |
| Discounted Future Market Cap | Growth | $45.33 | 1.73x | yes | Rev $0.8B, growth 17% (input: historical growth; tapered), Terminal P/S: 9.8x / 12.0x / 14.2x (bear / base = today's held flat / bull, cap 12x) |
| Peter Lynch Fair Value | Relative | $44.64 | 1.76x | yes | FFO/share $3.72, growth 3% (input: historical FFO/share growth, 10y median), PEG=13.64 (Overvalued) |
| Margin Trajectory | Growth | — | — | no | — |
| Earnings Power Value | Earnings | $10.99 | 7.15x | yes | Normalized EBIT (5y avg op income, one-time charges added back) $0.28B × (1−21%) / WACC 9.2% → EPV (no growth) |
| Residual Income | Asset | $9.16 | 8.57x | yes | BV $51.83 + 5yr PV of (ROE (TTM) 3.5% − Kₑ 9.3%) × BV; BV grows 2.3%/yr |
| Graham Number | Asset | $65.86 | 1.19x | yes | √(22.5 × FFO/share $3.72 × BVPS $51.83) — Graham's conservative floor |
| EV/EBITDA Relative | Relative | $101.30 | 0.78x | yes | EBITDA $0.61B × sector EV/EBITDA 20.0x |
| FCF Yield | Earnings | $46.80 | 1.68x | yes | FCF $522.6M / Kₑ 9.3% — zero-growth perpetuity |
| SBC-Adj FCF Yield | Earnings | $45.60 | 1.72x | yes | SBC-adj FCF $0.51B (FCF $0.52B − SBC $0.01B) capitalized at Kₑ |
| Ben Graham Formula | Earnings | $46.20 | 1.70x | yes | FFO/share $3.72 × (8.5 + 2×3.2%) × (4.4 / 5.3%) |
| ROIC-Justified P/B | Asset | $6.99 | 11.23x | yes | BV $51.83 × (ROIC 1.2% / WACC 9.2%) |
| P/Sales Sector | Relative | $38.40 | 2.05x | yes | Revenue $0.77B × sector P/S 6.0x |
| PEG Fair Value | Relative | $18.60 | 4.22x | yes | FFO/share $3.72 × (PEG 1.5 × growth 3.2% (input: historical FFO/share growth, 10y median)) → PE 4.7x |
| Earnings Yield | Earnings | $40.22 | 1.95x | yes | FFO/share $3.72 / required return 9.3% (Rf 4.3% + ERP 5.0%) |
| Funds From Operations Multiple | Relative | $52.78 | 1.49x | yes | FFO/share $3.72 × 14.2x P/FFO (route cohort median, n=85); FFO $0.45B (FFO incl. D&A + impairments, FY2025, companyfacts), shares 120M |
| Clinical Phase NPV | Growth | — | — | no | — |
| Merton | Asset | — | — | no | — |
| V5 Mechanical | — | — | — | no | — |
Solvency
| Field | Value |
|---|---|
| Net debt (REIT basis) | $2.6b |
| Net debt / FFO | 5.71x |
| Fixed-charge coverage (FFO basis) | 4.3x |
| Funds from operations (trailing) | $448.1m |
| Share count CAGR (dilution) | 14.0% |
| Burning cash | no |
REIT basis: leverage is read against funds from operations (FFO), not depreciation-gutted operating income. The header's implied growth runs on ADJUSTED FFO — FFO minus recurring maintenance capex — so the header's multiple and this leverage ratio use bases that differ by that capex; neither substitutes for the other.
Bullet Takeaways
- Agree Realty is a net-lease REIT that owns single-tenant retail properties leased to large national chains on long leases where the tenant pays the taxes, insurance, and upkeep, a low-touch, predictable rent stream backed by an A-rated balance sheet.
- The defining feature is external growth: the company funds steady acquisitions of new properties, guiding to $1.4 billion to $1.6 billion of investment in 2026, which is why per-share funds from operations keep rising but also why the share count grows quickly to pay for it.
- Watch the spread between the yields it buys properties at and its cost of capital, alongside 2026 adjusted-FFO guidance of $4.54 to $4.58 a share and a monthly dividend running about a 4.2% yield, because that spread is the engine of the whole model.
Bull Case
Net-lease REITs are best understood as spread businesses dressed up as landlords, and Agree Realty runs the model about as cleanly as it can be run. The company buys single-tenant retail properties leased to large national chains, then collects rent on long leases where the tenant, not the landlord, pays the operating costs: the filing notes the leases provide for "reimbursement from tenants for common area maintenance, insurance, real estate taxes and other operating expenses," which is what makes the rent stream so predictable. The bull case is that Agree pairs that predictable rent with disciplined tenant selection, its stated strategy is to "focus on 21st century industry-leading retailers," the chains most able to keep paying through a weak economy, which lowers the credit risk that sinks lesser net-lease portfolios.
The growth comes from acquisitions, and Agree has the balance sheet to keep buying. It carries an A-rated credit profile and more than $2.0 billion of available liquidity, which lets it raise capital cheaply and deploy it into new properties at a positive spread. Guidance calls for $1.4 billion to $1.6 billion of investment in 2026, and the recent results show the engine working: first-quarter adjusted funds from operations grew about 21% year over year. Each property bought at a yield above the cost of the capital used to buy it adds incrementally to per-share cash flow, and a company with cheap, plentiful capital can compound that spread quarter after quarter.
The income is the third leg and it is the point for most holders. Agree pays a monthly dividend, recently raised to an annualized $3.20 a share, up about 4.3% year over year, at a payout near 70% of adjusted funds from operations. A growing, well-covered dividend backed by long leases to strong tenants is exactly the durable income stream that net-lease investors pay a premium for, and the conservative payout leaves room for the dividend to keep rising with the portfolio. The bull case is a high-quality, A-rated compounding machine: predictable rent, disciplined growth, and a dividend that climbs as the property count does.
Bear Case
The advantage that built Agree's premium is the one most exposed to erosion: cheap capital. A net-lease REIT makes money on the spread between the yield it earns on a newly bought property and the cost of the capital it uses to buy it, and that spread is set by interest rates the company does not control. When rates rise, the cost of both its debt and its equity climbs, while the cap rates on the properties it wants to buy move more slowly, and the spread that powers external growth compresses. The model that looks like a compounding machine in a low-rate world looks like a treadmill in a high-rate one, because the company must keep issuing stock to grow, and it can only do so accretively when its own cost of equity stays low.
That dependence shows up directly in the share count, which has been growing rapidly, on the order of 14% a year, to fund the acquisitions. Issuing equity is how the model works, but it also means each new share has to be deployed at a positive spread or existing holders are diluted rather than enriched. If the acquisition market tightens or the cost of capital rises, the same growth machine that lifts per-share funds from operations can stall, and a REIT priced for continued accretive growth re-rates when that growth slows. The balance sheet also carries the usual REIT constraints: the filing flags restrictive covenants and "cross-default and cross-collateralization provisions" that let a lender "foreclose on multiple properties" if the company defaults, a reminder that leverage is structural to the model.
The valuation is where the bear has its clearest footing. On the static methods Agree looks richly valued: the asset, earnings-power, and peer-multiple lenses all sit below the price, and only a forward-growth assumption reaches it. The company trades at roughly 21 times adjusted funds from operations, which the data places at the very top of the REIT group. Inverted, that price implies only about 0.3% annual growth in adjusted funds from operations is needed to justify it, which sounds undemanding until you remember the premium multiple itself is the assumption: the market is paying top-of-group for the durability of the spread model. If rates stay high and accretive acquisitions get harder, the premium multiple, not the rent, is what corrects, and a top-of-group P/AFFO has the most room to compress.
Valuation
A REIT is valued on its adjusted funds from operations, the cash earnings plus property depreciation minus the maintenance spending that keeps buildings leasable, not on an operating multiple. At $73.29 (June 27, 2026) Agree trades at about 21 times adjusted funds from operations, and inverting that gives a deceptively gentle read: the price implies adjusted funds from operations growing only about 0.3% a year. The catch is that the 21-times multiple is itself the bet. The data places Agree's price-to-adjusted-funds-from-operations at the very top of the REIT peer group, so the market is not asking for fast growth; it is paying a premium price for the durability and quality of the cash flow.
The families of methods reflect that premium. The asset-value methods, which struggle with REITs because depreciation guts reported book and earnings, land well below the price, as does the normalized earnings-power method, both are the wrong lens for a property trust and the engine flags as much. The peer-multiple and dividend-based methods land closer, and the forward-growth method reaches the price. The honest summary is the familiar net-lease pattern: the static lenses say richly valued, and only the growth-and-quality read justifies the price. For a net-lease REIT the relevant comparison is to other net-lease names on a funds-from-operations basis, and on that comparison Agree sits at the top, which is a statement about quality as much as price, an A-rated balance sheet and best-in-class tenants command a premium, but a premium leaves less margin for error.
The balance-sheet read for a REIT is leverage against funds from operations and access to capital, not the corporate coverage math used for operating companies, and here the precise net-debt ratio cannot be cleanly resolved from the filing's debt tags. What is clear is the quality signal: an A-rated issuer profile from a major agency and more than $2.0 billion of liquidity, which is exactly the access to cheap capital the growth model depends on. The downside is bounded by the long leases and strong tenants; the upside, and the premium multiple, are gated by whether the cost of capital stays low enough to keep acquisitions accretive. The decisive variable is not the rent, which is contractual and durable, but the spread, which the interest-rate environment controls.
Catalysts
The recent print showed the acquisition engine running hot. First-quarter 2026 results included net income up about 33%, core funds from operations of $136.3 million up 21%, and adjusted funds from operations of $137.6 million up about 21% year over year, driven by acquisition volume. The company raised its 2026 adjusted-FFO guidance to $4.54 to $4.58 a share and set investment guidance at $1.4 billion to $1.6 billion, the spending that fuels the per-share growth.
The dividend is the steady catalyst for income holders. Agree declared a monthly dividend of $0.267 a share, an annualized $3.204, a 4.3% increase year over year, at a payout near 70% of adjusted funds from operations and a yield around 4.2%. A conservative payout against rising adjusted funds from operations is what supports continued dividend growth, so the dividend cadence tracks the health of the underlying portfolio.
Sentiment is constructive and steady. The covering analysts lean Buy, and several have nudged price targets higher into the low-to-mid $80s while keeping Outperform or Equal Weight ratings, reflecting confidence in the acquisition pipeline and the A-rated balance sheet rather than any single event. The variables that matter from here are the rate environment and the acquisition spread, because those determine whether the $1.4 billion to $1.6 billion of planned investment lands accretively, which is the engine behind both the guidance and the dividend growth.
Peer Cohorts (Per Segment, With Filing Citations)
Agree Realty (single segment - retail net-lease REIT) (reported)
- O (REALTY INCOME CORP)
- FY2025 10-K: …clients, generally on a net lease basis. That business activity spans various geographic boundaries and includes property types and clients engaged in various industries. Even though we have a single segment, we believe our investors continue to view diversification as a key component of our investment philosophy and…
- FY2025 10-K: 025 or 2024 for the year ended December 31, 2025, respectively and (ii) rental revenue for 126 properties under development or completed developments that do not meet our same store pool definition for the years ended December 31, 2025, respectively. (4) "Other excluded revenue" primarily consists of reimbursements…
- NNN (NNN REIT, INC.)
- FY2025 10-K: , Consolidated Financial Statements for a summary and the anticipated impact of each accounting pronouncement on NNN's financial position and results of operations. 27 Results of Operations Property Analysis General. The following table summarizes the Property Portfolio as of December 31: 2025 2024 Properties Owned:…
- FY2025 10-K: Line of credit payable $ 348,100 $ - Notes payable, net of unamortized discount and unamortized debt costs 4,472,324 4,373,803 Accrued interest payable 40,557 29,699 Other liabilities 110,072 106,951 Total liabilities 4,971,053 4,510,453 Commitments and contingencies (Note 13) Equity: Stockholders' equity: Common…
- NTST (NETSTREIT Corp.)
- FY2025 10-K: …agreements to provide for an aggregate of $550.0 million in senior unsecured term loans and to upsize our senior unsecured revolving credit facility to $500.0 million. General Investment Criteria Our objective is to maximize stockholder value by generating attractive risk-adjusted returns through owning, managing,…
- FY2025 10-K: …the potential impact of the guidance and potential additional disclosures required. Note 3 - Leases Tenant Leases The Company acquires, owns, and manages single-tenant commercial retail net lease properties, the majority of which have long-term triple-net leases where the tenant is generally responsible for all…
- FCPT (Four Corners Property Trust, Inc.)
- FY2025 10-K: …as the related parameters or contingencies are met, rather than on a straight-line basis over the applicable lease term. Costs paid by the lessor and reimbursed by the lessees are included in variable lease payments and presented on a gross basis within rental revenue. Sales taxes collected from lessees and remitted…
- FY2025 10-K: …Agreement provides for borrowings up to $940 million, consisting of (1) a revolving credit facility in an aggregate principal amount of $350 million and term loans in an aggregate principal amount of $590 million comprised of (i) a $100 million term loan with a maturity date of November 9, 2026 (the "Term Loan A-2…
- EPRT (Essential Properties Realty Trust, Inc.)
- FY2025 10-K: …between the rental revenue recognized to date and the lease payments that have been collected is recognized as a current period reduction of rental revenue in the consolidated statements of operations. Conversely, if the assessment of the collectability changes from not probable to probable, any difference is…
- FY2025 10-K: …• Health and fitness, and • Grocery. We believe that, in general, properties leased to tenants in these industries and similar businesses are essential to the generation of the tenants' sales and profits. We also believe that these businesses have favorable growth potential and, because of their nature, they are more…
- CURB (Curbline Properties Corp.)
- FY2025 10-K: 26 Information as to the Company's largest tenants based on total ABR and Company-owned GLA at December 31, 2025, is set forth in Item 7. "Management's Discussion and Analysis of Financial Condition and Results of Operations" under the caption "Executive Summary - Tenant Demand and Company Fundamentals" of this Annual…
- FY2025 10-K: …financial services, beverage retail, telecommunications, beauty and hair salons, and fitness, among others. Convenience properties offer the opportunity to generate above-average, occupancy-neutral cash flow growth (compared to cash flow growth levels for other retail real estate assets) through rental income…
- BNL (BROADSTONE NET LEASE, INC.)
- FY2025 10-K: …build-to-suit developments, which do not generate revenue until stabilization, are excluded from the calculations of total cash capitalization, weighted average lease terms, and weighted average rent increases. 46 Table of Contents Build-to-Suit Development Projects The following table summarizes the Company's…
- FY2025 10-K: …initial cash capitalization rate of 7.0%, weighted average remaining lease term of 14.2 years, weighted average annual rent increase of 2.6%, and a weighted average straight-line yield of 8.4%. • Sold, on a forward basis, 621,487 shares of our common stock at a weighted average price per share of $18.33 for estimated…
- WPC (W. P. Carey Inc.)
- FY2025 10-K: …during 2025 ( Note 16 ). (b) Amounts for the years ended December 31, 2025 and 2024 include $3.2 million and $16.3 million, respectively, of funding for a construction loan accounted for as an equity method investment ( Note 8 ). Amount for the year ended December 31, 2025 includes $5.0 million to acquire a 47.5%…
- FY2025 10-K: …agreement date), since this agreement resulted in a lease modification. In connection with this transaction, we reclassified the following amounts to Net investments in finance leases and loans receivable: (i) $ 129.7 million from Land, buildings and improvements - net lease and other, (ii) $ 20.3 million from…
Methodology Note
- Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
- Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
- Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
- Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.
Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.
Sources
Agree Realty Q1 2026 results · company FY2026 guidance, 2026 · company announcement, 2026 · analyst actions, 2026