FEDERAL REALTY INVESTMENT TRUST (FRT): what the price requires
At today's price, FEDERAL REALTY INVESTMENT TRUST (FRT) is priced for -1.5% 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: 2026-07-14 · Exported: 2026-07-16 · Source: https://boothcheck.com/report/FRT
Headline
| Field | Value |
|---|---|
| Ticker | FRT |
| Company | FEDERAL REALTY INVESTMENT TRUST |
| Current price | $121.83/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 | -1.5% |
| Price-to-FFO | 13.5x |
| FFO yield | 7.4% |
Solve inputs: computed at a 9.7% cost of equity with 4% terminal growth over a 5-year stage; each 1pp of cost of equity moves the implied growth ~3.8pp.
How unusual the bet is: within-range
| Reference | Value |
|---|---|
| vs own history | -0.54σ |
| cohort percentile (of 88 peers) | 39 |
| implied end-window share | 0% |
Valuation X-Ray
The price is justified by relative-multiple and growth-DCF; asset-based/earnings-power land below the price.
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 | 1.52x | 5 | expensive |
| Earnings | 1.65x | 5 | expensive |
| Relative | 0.86x | 6 | justifies |
| Growth | 1.01x | 3 | expensive |
Families that justify the price: Relative, Growth Families that call it expensive: Asset, Earnings
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=19)
| Model | Family | FV | Price/FV | Applicable | Methodology |
|---|---|---|---|---|---|
| DCF Perpetual Growth | Growth | $138.32 | 0.88x | yes | FCF base $0.7B, growth 7% (input: historical growth), terminal g 4.0%, WACC 9.2%, 6yr projection |
| DCF Exit Multiple | Growth | $120.90 | 1.01x | yes | Exit EV/EBITDA: 8.1x / 10.1x / 12.1x (bear / base = today's held flat / bull), 6yr |
| Relative Valuation | Relative | $255.34 | 0.48x | yes | P/E 26.43x (blended: static sector reference 35x + trailing (TTM) 14x), scenarios: 22.0x / 26.4x / 30.9x (bear / base = reference held flat / bull), EV/EBITDA 20x |
| Simple DDM | Growth | — | — | no | — |
| Two-Stage DDM | Growth | — | — | no | — |
| Simple Excess Return | Asset | $63.17 | 1.93x | yes | BV/sh $38.21, ROE (TTM) 15.3%, ke 9.3% |
| Two-Stage Excess Return | Asset | $80.25 | 1.52x | yes | 5yr excess ROE then converge to ke=9.3% |
| Discounted Future Market Cap | Growth | $88.21 | 1.38x | yes | Rev $1.3B, growth 7% (input: historical growth; tapered), Terminal P/S: 6.7x / 8.0x / 9.3x (bear / base = today's held flat / bull, cap 8x) |
| Peter Lynch Fair Value | Relative | $107.76 | 1.13x | yes | FFO/share $8.98, growth 12% (input: historical FFO/share growth, 10y median), PEG=1.76 (Overvalued) |
| Margin Trajectory | Growth | — | — | no | — |
| Earnings Power Value | Earnings | $40.59 | 3.00x | yes | Normalized EBIT (5y avg op income, one-time charges added back) $0.51B × (1−21%) / WACC 9.2% → EPV (no growth) |
| Residual Income | Asset | $82.12 | 1.48x | yes | BV $38.21 + 5yr PV of (ROE (TTM) 15.3% − Kₑ 9.3%) × BV; BV grows 8.8%/yr |
| Graham Number | Asset | $87.86 | 1.39x | yes | √(22.5 × FFO/share $8.98 × BVPS $38.21) — Graham's conservative floor |
| EV/EBITDA Relative | Relative | $245.32 | 0.50x | yes | EBITDA $1.08B × sector EV/EBITDA 20.0x |
| FCF Yield | Earnings | $73.68 | 1.65x | yes | FCF $627.9M / Kₑ 9.3% — zero-growth perpetuity |
| SBC-Adj FCF Yield | Earnings | $71.68 | 1.70x | yes | SBC-adj FCF $0.61B (FCF $0.63B − SBC $0.02B) capitalized at Kₑ |
| Ben Graham Formula | Earnings | $242.07 | 0.50x | yes | FFO/share $8.98 × (8.5 + 2×11.8%) × (4.4 / 5.3%) |
| ROIC-Justified P/B | Asset | $18.53 | 6.57x | yes | BV $38.21 × (ROIC 4.4% / WACC 9.2%) |
| P/Sales Sector | Relative | $90.76 | 1.34x | yes | Revenue $1.31B × sector P/S 6.0x |
| PEG Fair Value | Relative | $159.38 | 0.76x | yes | FFO/share $8.98 × (PEG 1.5 × growth 11.8% (input: historical FFO/share growth, 10y median)) → PE 17.7x |
| Earnings Yield | Earnings | $97.08 | 1.25x | yes | FFO/share $8.98 / required return 9.3% (Rf 4.3% + ERP 5.0%) |
| Funds From Operations Multiple | Relative | $127.33 | 0.96x | yes | FFO/share $8.98 × 14.2x P/FFO (route cohort median, n=85); FFO $0.78B (FFO incl. D&A + impairments, FY2025, companyfacts), shares 87M |
| Clinical Phase NPV | Growth | — | — | no | — |
| Merton | Asset | — | — | no | — |
| V5 Mechanical | — | — | — | no | — |
Solvency
| Field | Value |
|---|---|
| Net debt (REIT basis) | $4.8b |
| Net debt / FFO | 6.23x |
| Fixed-charge coverage (FFO basis) | 5.2x |
| Funds from operations (trailing) | $778.3m |
| Share count CAGR (dilution) | 2.5% |
| 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
- Federal Realty owns a small, dense portfolio of grocery-anchored and mixed-use retail in wealthy, supply-constrained suburbs, and the quality shows in the numbers: portfolio occupancy reached 96.1% and the office component within its mixed-use assets was 99% leased in the first quarter, the kind of demand a commodity strip mall does not command.
- The defining risk is durability of growth, not balance-sheet stress: at about 14 times adjusted funds from operations the price asks for almost no growth in that cash measure, so the bet rides on continued mid-single-digit results and the 58-year dividend-raise streak surviving a retail cycle that is unkind to weaker landlords.
- Watch the next print and the development pipeline: first-quarter FFO rose 10.6% to $1.88 a share, management raised full-year Nareit FFO guidance to $7.46 to $7.55 a share, and roughly $400 million is committed to residential projects like Santana Row.
Bull Case
Fifty-eight consecutive years of dividend increases is not a marketing line; it is the visible residue of a particular way of owning real estate. Federal Realty has raised its payout every year through multiple recessions, a financial crisis, and a pandemic that was supposed to end physical retail. A streak that long is only possible if the underlying cash flow is unusually durable, and the durability comes from what the company chooses to own: a deliberately small portfolio of grocery-anchored and mixed-use centers concentrated in dense, affluent, supply-constrained suburbs. The grocery anchor pulls steady foot traffic that does not depend on discretionary spending, and the wealthy trade areas mean the tenants around it can pay rent through a downturn.
The pricing power that flows from scarcity is the moat. You cannot build a new competing center next to a Federal Realty property in most of its markets, because the land is taken and the entitlements are nearly impossible to get. That scarcity shows up as occupancy and leasing strength: portfolio occupancy hit 96.1% in the first quarter, and the office space inside its mixed-use assets was 99% leased. When a landlord runs near-full in a retail environment where weaker players are giving away space, it has the leverage to push rent on renewal rather than defend it. The company signed more than 100 leases on roughly 649,000 square feet in the quarter, a steady churn of remarking space upward.
The cash this throws off is growing faster than the price seems to assume. First-quarter funds from operations rose 10.6% to $1.88 a share on revenue up 10.3%, both ahead of expectations, and management raised full-year Nareit and core FFO guidance to $7.46 to $7.55 a share. Adjusted funds from operations, the cash left after the upkeep these centers require, supports the dividend with room to spare, and fixed-charge coverage near 5.1 times confirms the rent comfortably clears interest and preferred obligations. This is a balance sheet servicing its leverage out of operations, not refinancing it out of difficulty.
There is also a development lever that a pure strip-mall owner lacks. Federal Realty is putting roughly $400 million into residential projects woven into its existing mixed-use assets, including Santana Row. Building apartments on land it already owns, inside destinations it already operates, lets the company manufacture new cash flow at a yield above what buying finished buildings would offer. That is how a slow-growth retail landlord keeps compounding: not by acquiring at market prices, but by densifying the irreplaceable real estate already on its books.
Bear Case
A quality retail landlord can still be a mediocre investment if the market has already decided how much that quality is worth, and the reverse-engineered price here is the place to start. At about $120.43 (June 28, 2026) the stock trades near 14 times adjusted funds from operations, and inverting that multiple, the price embeds essentially no growth in that cash measure, even tolerating a slight decline. That sounds like a low bar, and it is. The bear case for Federal Realty is therefore not the usual overvaluation argument; the price is not asking for heroics. It is that even a modest, no-growth bar can be missed if the things that have made this portfolio special come under pressure, and a few of them are quietly shifting.
Retail is a cyclical business dressed up as a stable one. Grocery-anchored centers are more defensive than enclosed malls, but they are not immune to the same forces: e-commerce keeps taking share of categories that used to need physical space, tenant bankruptcies cluster in downturns, and even an affluent trade area cuts discretionary spending when the economy turns. Federal Realty's 96.1% occupancy and 99%-leased office component are strengths today, but they are also near the top of what is achievable, which means the easy gains are behind it. From a near-full portfolio, future growth has to come from rent increases and development rather than from filling empty space, and rent increases depend on a healthy tenant base that a recession would test.
The development pipeline that the bull frames as a growth lever is also where capital risk concentrates. Committing roughly $400 million to residential projects like Santana Row means deploying cash today against rents that arrive years later, after construction and lease-up. Mixed-use development carries cost overruns, timing slippage, and the risk that the apartment or retail market softens between breaking ground and stabilizing. For a company whose entire appeal is steady, predictable cash, a large multi-year development bet is the part of the story with the widest range of outcomes, and the return depends on conditions no one can underwrite three years out.
The leverage frame caps the picture honestly. For a REIT, leverage is read against funds from operations, not depreciation-reduced operating income, and fixed-charge coverage near 5.1 times says the obligations are comfortably met. The share count, though, has been drifting up about 2.5% a year, so part of the cash growth is being spread across more shares, thinning the per-share gain. None of this is a solvency worry. The bear is subtler: a famously high-quality name, priced for almost no growth yet still not cheap on the asset and earnings lenses, leaning on a development pipeline and a 58-year dividend streak that the market has watched for decades and largely priced. If the retail cycle turns or the development bets disappoint, the modest bar in the price is exactly what gets missed, and a dividend king trading on its reputation has the furthest to fall in trust.
Valuation
What stands out about Federal Realty's price is how little it asks of the future. At about $120.43 the stock trades near 14 times adjusted funds from operations, the cash that remains after the recurring upkeep these centers need, and inverting that multiple the price embeds essentially no growth in that cash, tolerating even a slight decline. For a portfolio compounding its payout for fifty-eight straight years, that is a striking starting point: the market is paying for the existing adjusted cash stream and crediting almost nothing for it to grow. Funds from operations before the upkeep deduction is the gross figure, and it carries a marginally lower multiple near 13 times; it is the raw number the adjusted measure refines, while the adjusted figure is what funds the dividend and what the price properly sits against.
Across the methods used to triangulate the stock, the disagreement is itself informative. The peer-multiple lens reads Federal Realty as cheap relative to its retail-REIT cohort, a notable signal for a name usually thought of as a premium-priced bellwether. The forward-growth lens lands near the price. The asset-value and earnings-power lenses mark it expensive, the standard REIT artifact where heavy depreciation drags reported returns below the economic reality. Put together, the pattern is unusual for this company: a quality name the market is pricing close to, not above, where its peers trade, with the growth methods roughly endorsing the price and only the depreciation-distorted frames objecting. This is closer to a value read on a high-quality asset than the rich-multiple framing the name often carries.
The concrete thing that has to be true is modest, which cuts both ways. The price requires only that the adjusted cash hold roughly flat, and the company is currently doing far better than that: first-quarter FFO rose 10.6% to $1.88 a share, and management raised full-year Nareit and core FFO guidance to $7.46 to $7.55 a share. If that mid-single-digit-plus growth persists, the price is asking for a fraction of what the business is delivering. The risk is not that the bar is high; it is that retail is cyclical and the near-full 96.1% occupancy leaves little room for occupancy-driven gains, so a downturn could pull results back toward the no-growth line the price assumes. A recent analyst note trimmed its target to $125 from $130 while keeping a buy rating; that target sits just above today's price and is consistent with a framework that sees the growth methods near the price and the relative lens reading cheap, rather than a stretched valuation.
Solvency reinforces the read rather than complicating it. Leverage on a REIT is measured against funds from operations, and fixed-charge coverage near 5.1 times shows the rent comfortably clears interest and preferred claims, with the obligations serviced out of operations. The share count has drifted up about 2.5% a year, a mild dilution that spreads the cash growth across a slowly widening base. The decisive question for Federal Realty is not whether it can carry its debt; it plainly can. It is whether a portfolio priced for no growth keeps quietly delivering the mid-single-digit growth it has shown, in which case the price is paying for less than the business produces.
Catalysts
The first quarter gave the bull case fresh evidence and reset the guide higher. Funds from operations rose 10.6% to $1.88 a share on revenue up 10.3% to $341.08 million, both above expectations, and management raised and tightened full-year guidance to net income of $3.94 to $4.03 a share and Nareit and core FFO of $7.46 to $7.55 a share, while lifting the quarterly dividend to $1.13 and extending its dividend-increase streak to 58 consecutive years. Leasing stayed brisk, with more than 100 leases on roughly 649,000 square feet, portfolio occupancy at 96.1%, and about $159 million of property sales and acquisitions. The next earnings release is scheduled for July 31, and the readout to watch is whether occupancy and leasing spreads hold against the raised guide.
The development pipeline is the medium-term swing factor. Federal Realty has committed roughly $400 million to residential projects woven into its existing mixed-use destinations, including Santana Row, which is the company's main lever for manufacturing new cash flow on land it already owns. Progress on lease-up and stabilization there will shape whether the company can keep growing per-share cash faster than the slight dilution from a share count rising about 2.5% a year. On the sell side, a recent note lowered its price target to $125 from $130 while keeping a buy rating, a small trim that leaves the target just above the current price.
Peer Cohorts (Per Segment, With Filing Citations)
Real estate (retail and mixed-use properties) (reported)
- REG (REGENCY CENTERS CORPORATION)
- (no filing in the citation store)
- KIM (KIMCO REALTY CORPORATION)
- (no filing in the citation store)
- BRX (Brixmor Property Group Inc.)
- (no filing in the citation store)
- KRG (KITE REALTY GROUP TRUST)
- (no filing in the citation store)
- PECO (PHILLIPS EDISON & COMPANY, INC.)
- (no filing in the citation store)
- SKT (TANGER INC)
- (no filing in the citation store)
- MAC (MACERICH CO)
- (no filing in the citation store)
- GTY (GETTY REALTY CORP.)
- (no filing in the citation store)
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
Federal Realty Q1 2026 results · Federal Realty Q1 2026 results and 2026 guidance · Ladenburg note, 2026 · Federal Realty Q2 2026 earnings announcement