NNN REIT, INC. (NNN): what the price assumes
boothcheck covers NNN REIT, INC. (NNN) but does not put one priced-in number on it: here the defensible answer is the evidence rather than a point estimate. boothcheck publishes no house fair value, target price, or buy/sell rating. Narrative composed 2026-06-27.
Generated: 2026-08-08 · Exported: 2026-08-09 · Source: https://boothcheck.com/report/NNN
Headline
| Field | Value |
|---|---|
| Ticker | NNN |
| Company | NNN REIT, INC. |
| Current price | $47.35/sh |
What The Price Assumes (Inversion)
The assumption today's price embeds, recovered by inverting the valuation.
| Field | Value |
|---|---|
| Inversion basis | reit |
| Price-to-FFO | 13.1x |
| FFO yield | 7.6% |
The price sits below what even a 5%/yr funds-from-operations decline would warrant; the inversion reports a bound, not a solved growth path.
Solve inputs: computed at a 8.7% cost of equity with 4% terminal growth over a 5-year stage.
How unusual the bet is: within-range
| Reference | Value |
|---|---|
| vs own history | -2.09σ |
| cohort percentile (of 105 peers) | 33 |
| 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 | 2.16x | 5 | expensive |
| Earnings | 1.65x | 4 | expensive |
| Relative | 1.00x | 6 | justifies |
| Growth | 0.90x | 5 | justifies |
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 7.3%); the inversion above states its own rate.
Per-Model Detail (n=20)
| Model | Family | FV | Price/FV | Applicable | Methodology |
|---|---|---|---|---|---|
| DCF Perpetual Growth | Growth | $90.15 | 0.53x | yes | FCF base $0.7B, growth 7% (input: historical growth), terminal g 4.0%, WACC 7.3%, 6yr projection |
| DCF Exit Multiple | Growth | $50.02 | 0.95x | yes | Exit EV/EBITDA: 11.9x / 13.9x / 15.9x (bear / base = today's held flat / bull), 6yr |
| Relative Valuation | Relative | $89.25 | 0.53x | yes | P/E 26.19x (blended: static sector reference 35x + trailing (TTM) 13x), scenarios: 21.8x / 26.2x / 30.5x (bear / base = reference held flat / bull), EV/EBITDA 20x |
| Simple DDM | Growth | $642.85 | 0.07x | yes | DPS $2.41, g=8.8% (sustainable: ROE (TTM) × retention; not the terminal-growth assumption), ke=9.3% |
| Two-Stage DDM | Growth | $52.44 | 0.90x | yes | Stage 1: 8% for 5yr, Stage 2: 3.5% perpetual |
| Simple Excess Return | Asset | $22.37 | 2.12x | yes | BV/sh $23.41, ROE (TTM) 8.8%, ke 9.3% |
| Two-Stage Excess Return | Asset | $21.88 | 2.16x | yes | 5yr excess ROE then converge to ke=9.3% |
| Discounted Future Market Cap | Growth | $26.65 | 1.78x | yes | Rev $0.9B, 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 | $43.80 | 1.08x | yes | FFO/share $3.65, growth 8% (input: historical FFO/share growth, 10y median), PEG=2.89 (Overvalued) |
| Margin Trajectory | Growth | — | — | no | — |
| Earnings Power Value | Earnings | $12.49 | 3.79x | yes | Normalized EBIT (5y avg op income, one-time charges added back) $0.53B × (1−21%) / WACC 7.3% → EPV (no growth) |
| Residual Income | Asset | $21.79 | 2.17x | yes | BV $23.41 + 5yr PV of (ROE (TTM) 8.8% − Kₑ 9.3%) × BV; BV grows 5.7%/yr |
| Graham Number | Asset | $43.84 | 1.08x | yes | √(22.5 × FFO/share $3.65 × BVPS $23.41) — Graham's conservative floor |
| EV/EBITDA Relative | Relative | $75.30 | 0.63x | yes | EBITDA $0.86B × sector EV/EBITDA 20.0x |
| FCF Yield | Earnings | $22.48 | 2.11x | yes | FCF $667.1M / Kₑ 9.3% — zero-growth perpetuity |
| SBC-Adj FCF Yield | Earnings | — | — | no | — |
| Ben Graham Formula | Earnings | $74.47 | 0.64x | yes | FFO/share $3.65 × (8.5 + 2×7.9%) × (4.4 / 5.3%) |
| ROIC-Justified P/B | Asset | $5.10 | 9.28x | yes | BV $23.41 × (ROIC 1.6% / WACC 7.3%) |
| P/Sales Sector | Relative | $29.51 | 1.60x | yes | Revenue $0.93B × sector P/S 6.0x |
| PEG Fair Value | Relative | $43.38 | 1.09x | yes | FFO/share $3.65 × (PEG 1.5 × growth 7.9% (input: historical FFO/share growth, 10y median)) → PE 11.9x |
| Earnings Yield | Earnings | $39.46 | 1.20x | yes | FFO/share $3.65 / required return 9.3% (Rf 4.3% + ERP 5.0%) |
| Funds From Operations Multiple | Relative | $51.29 | 0.92x | yes | FFO/share $3.65 × 14.1x P/FFO (route cohort median, n=85); FFO $0.69B (FFO incl. D&A + impairments, FY2025, companyfacts), shares 188M |
| Clinical Phase NPV | Growth | — | — | no | — |
| Merton | Asset | — | — | no | — |
| V5 Mechanical | — | — | — | no | — |
Economic-Unit Decomposition (Sum Of The Parts)
Only one reportable economic unit is present in the current topology source. Consolidated operating lenses remain available, but there is no multi-unit decomposition.
| Unit | Role | Valuation basis | Revenue | Reported profit | Value evidence | Status |
|---|---|---|---|---|---|---|
| Net-lease real estate (REIT) | operating | enterprise | 0.9B reported-currency | — | withheld | unresolved no unit value |
No total common-equity value is stated. One or more material units lack a supported unit value. The displayed values are an indicative subtotal; consolidated debt and cash cannot be applied to a fraction of the company.
Solvency
| Field | Value |
|---|---|
| Net debt (REIT basis) | $4.5b |
| Net debt / FFO | 6.50x |
| Fixed-charge coverage (FFO basis) | 4.4x |
| Funds from operations (trailing) | $686.8m |
| Share count CAGR (dilution) | 1.9% |
| 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
- NNN owns 3,711 single-tenant retail properties leased on long-term net terms, where the tenant pays taxes, insurance, and maintenance, leaving the landlord with rent that is almost pure margin: the FY2025 portfolio ran 98.6% occupied at a 10.2-year weighted average remaining lease term the weighted average remaining lease term of the Property Portfolio was 10.2 years.
- The clearest risk is funding cost: the business grows by buying properties at a cash cap rate (7.5% on Q1 2026 purchases) above its borrowing cost, and that spread compresses if rates stay high while cap rates do not follow, which is exactly why some analysts model lower 2026 growth than net-lease peers.
- The next markers are quarterly: acquisition volume (Q1 2026 deployed $145.4M across 41 properties) and the 2026 AFFO-per-share guide, raised after Q1 to $3.53 to $3.59.
Bull Case
The reflex worry on a net-lease REIT in a higher-rate world is that its whole model breaks: it borrows to buy buildings, and if money costs more, the spread it earns disappears. NNN's numbers say the fear is real at the margin but not at the core. The portfolio is 98.6% occupied across 3,711 properties, and the leases run 10.2 years on a weighted average basis, with most carrying built-in rent bumps. The 10-K describes leases the majority of which include negotiated increases in rent, so the existing book compounds modestly on its own before a single new acquisition closes. That is the part of the income that does not care what the Fed does next.
What NNN actually sells is the boring middle of American retail: convenience stores, auto-service, restaurants, the tenants whose business is local and whose rent is a small, reliable line on their own income statement. The net-lease structure pushes property taxes, insurance, and upkeep onto the tenant, so reported rent converts to cash with very little leakage. That shows up in the coverage: fixed charges are covered roughly 4.4 times over, which is the buffer that lets a 36-year run of annual dividend increases keep going. The dividend now annualizes to $2.40 against FFO near $3.65 a share, a payout the cash flow comfortably carries rather than strains to meet.
The growth engine is disciplined rather than dramatic. In Q1 2026 the company invested $145.4 million in 41 properties at a 7.5% initial cash cap rate, and the 10-K shows the other side of the trade, selling weaker assets at tightening cap rates Weighted average cap rate (1) 6.4 % 7.3 % for 2025 and 2024 dispositions. Buying at 7.5% and pruning at 6.4% is the spread business working in NNN's favor: it recycles capital out of lower-yielding properties into higher-yielding ones. Management raised the 2026 AFFO-per-share outlook to $3.53 to $3.59 after the first quarter, which is the company telling the market the acquisition spread is still wide enough to fund growth without leaning on dilutive equity.
Bear Case
The price embeds one assumption above all: that NNN can keep buying properties at a yield comfortably above its cost of capital, indefinitely. That spread is the entire growth story, and it is the most fragile thing in the model. The 10-K shows the squeeze already in motion: dispositions went out the door at a 6.4% weighted average cap rate in 2025, down from 7.3% a year earlier Weighted average cap rate (1) 6.4 % 7.3 %, while the company's own borrowing has had to be hedged against rising rates, with forward-starting swaps on a $200 million notional struck to lock future Term Loan draws to hedge the risk of changes in the interest cash outflows associated with future draws on NNN's Term Loan. If acquisition cap rates keep grinding lower while debt costs hold, the spread that funds per-share growth narrows toward nothing, which is the mechanism behind analysts modeling NNN's 2026 growth below net-lease peers.
The second fragility is single-tenant concentration of credit risk, dressed up as diversification. Owning 3,711 properties sounds diversified, but each is leased to one tenant, and a net-lease landlord's downside is a tenant that stops paying. The filing is candid that rent recognition can reverse: when collection stops being probable, rental revenue and any related accrued rent are reversed as a reduction to rental income and the tenant moves to cash-basis accounting. Occupancy at 98.6% is excellent, but it is a snapshot, and a wave of mid-market retail and restaurant bankruptcies would convert the dependable rent roll into a re-leasing problem at a moment when retail demand for second-generation space is softest.
The third is the quieter one. NNN's value families disagree sharply about whether today's price is supported. The methods anchored on asset value and earnings power land well below the price, while only the relative-multiple and growth-discounted methods reach it. A buyer here is leaning on the view that net-lease REITs deserve their peer multiple and that growth continues, not on a hard floor of in-place earnings power. Pair that with a share count that has crept up about 1.9% a year to fund acquisitions, and the bull case is implicitly underwriting that every new share bought a property earning more than the dividend it now has to pay. The track record says it has; the price says it must keep doing so.
Valuation
Start with what the price is paying for. At about $45 (June 27, 2026), NNN trades near 12.5 times funds from operations and roughly 13 times adjusted funds from operations, the cash metrics that actually govern a net-lease REIT rather than the depreciation-gutted earnings line. That multiple is low enough that the price implies almost no growth at all: it sits below what even a steady 5%-a-year decline in funds from operations would warrant. The market is not paying for an acceleration here. It is paying for the rent roll to roughly hold, and pricing in a discount on top of that.
The valuation methods split along a clean line. The methods built on asset value and on static earnings power land well below: strip out growth entirely and value the in-place cash flow as a perpetuity, and you get a number in the low $20s. That spread is the information. It says the price is defended by NNN being a normal member of its peer group and by its dividend compounding, not by a hard book-value or earnings-power floor.
The balance sheet is the reassurance under all of it. Fixed charges are covered about 4.4 times over, and the dividend at $2.40 annualized against FFO near $3.65 leaves real headroom rather than running to the edge. The leverage ratio against funds from operations is not cleanly resolvable from the corporate debt tags, but the coverage figure and the 36-year dividend-increase record describe a balance sheet built to carry the bet through a cycle. The risk is not solvency. It is that the acquisition spread, the thing that turns a stable rent roll into per-share growth, keeps narrowing.
Catalysts
The first quarter of 2026 set the tone for the year. NNN reported FFO of $0.86 and AFFO of $0.87 per share, matching the prior-year quarter, with occupancy at 98.6% across 3,711 properties and a 10.1-year weighted average lease term. The company invested $145.4 million in 41 properties at a 7.5% initial cash cap rate during the quarter and sold 25 properties for $35.8 million, the recycle-and-redeploy pattern that drives its per-share growth. On the strength of that print, management raised 2026 AFFO-per-share guidance to $3.53 to $3.59 and updated Core FFO to $3.48 to $3.54.
The analyst community sits in a deliberate split. The consensus rating is a Hold with a price target near $47, and the views diverge on the same fact: acquisition spreads. Morgan Stanley raised its target to $50 with an Overweight rating, while BofA's Jana Galan lifted hers only to $46 and kept an Underperform, citing NNN's expected 2026 growth lagging net-lease peers. The bullish case ties to elevated deal flow and disciplined underwriting widening the income base; the bearish case is that the same deal flow is being done at cap rates that no longer clear the bar versus peers.
The markers to watch are mechanical and quarterly. Acquisition volume and the cash cap rate on new investments tell you whether the spread is holding; the AFFO-guidance trajectory tells you whether management still believes it. The dividend, at $0.60 quarterly and a 36-year increase streak, is the slow signal underneath, a 69% AFFO payout ratio that gives the board room to extend the streak rather than defend it.
Peer Cohorts (Per Segment, With Filing Citations)
Net-lease real estate (REIT) (reported)
- O (REALTY INCOME CORP)
- FY2025 10-K: 209;in growth over time, and reduce our exposure to variable operating costs, contributing to the durability and consistency of our cash flows across market cycles. Our asset management approach includes ongoing monitoring of client performance, property‑level oversight, proactive leasing and disposition strategies,…
- FY2025 10-K: …construction and capitalized interest costs. (2) Our clients occupying the new properties are 70.4 % retail, 29.1 % industrial, and 0.5 % other property types based on net operating income. Approximately 40 % of the net operating income generated from acquisitions during the year ended December 31, 2025 was from…
- ADC (Agree Realty Corporation)
- FY2025 10-K: AAP and is effective for interim reporting periods within annual reporting periods beginning after December 15, 2027. Early adoption is permitted. The Company continues to evaluate the impact of the guidance. Note 3 - Leases Tenant Leases The Company is primarily focused on the ownership, acquisition, development and…
- FY2025 10-K: …the Operating Partnership, of which the Company is the sole general partner and in which the Company held a 99.7% common interest as of December 31, 2025. Refer to Note 1 -Organization in the notes to the consolidated financial statements in this Form 10-K for further information on the ownership structure. Under the…
- EPRT (Essential Properties Realty Trust, Inc.)
- FY2025 10-K: …companies as regional and national operators with between 10 and 250 locations and $20 million to $1 billion in annual revenue, and we also opportunistically invest in properties leased to smaller companies, which we define as regional or local operators with fewer than 10 locations and less than $20 million in…
- FY2025 10-K: …of our loan and direct financing lease portfolio. Other operating income: Gain on dispositions of real estate, net. G ain on dispositions of real estate, net, increased by $6.9 million for the year ended December 31, 2025, as compared to the year ended December 31, 2024. We disposed of 60 and 46 real estate…
- WPC (W. P. Carey Inc.)
- FY2025 10-K: …by Lineage during the three-year period, our investment will convert to common shares. Revenue Recognition, Real Estate Leased to Others - We lease real estate to others primarily on a triple-net leased basis, whereby the tenant is generally responsible for operating expenses relating to the property, including…
- FY2025 10-K: …depreciation and amortization. We recognized an aggregate Gain on sale of real estate, net, of $ 2.8 million during the year ended December 31, 2025 related to this transaction. This property was sold in July 2025. As a result, the carrying value of Net investments in finance leases and loans receivable decreased by…
- FCPT (Four Corners Property Trust, Inc.)
- FY2025 10-K: REITs, investment companies, private equity and hedge fund investors, sovereign funds, restaurant and retail operators, lenders and other investors, some of whom are significantly larger and have greater resources and lower costs of capital. Increased competition will make it more challenging to identify and…
- FY2025 10-K: …were sold . During the year ended December 31, 2024, the Company invested $ 273.0 million , including transaction costs, in 87 properties located in twenty-five states, and allocated the investment as follows: $ 119.9 million to land, $ 130.0 million to buildings and improvements, and $ 23.1 million to intangible…
- GTY (GETTY REALTY CORP.)
- FY2025 10-K: …the net amortization of intangible market lease assets and liabilities, adjustments recorded for the recognition of rental income from direct financing leases, and the amortization of deferred lease incentives (collectively, "Revenue Recognition Adjustments"), (ii) environmental accretion expenses, environmental…
- FY2025 10-K: …including 1,145 properties owned by us and 29 properties that we leased from third-party landlords. As a REIT, we are not subject to federal corporate income tax on the taxable income we distribute to our stockholders. In order to continue to qualify for taxation as a REIT, we are required, among other things, to…
- BNL (BROADSTONE NET LEASE, INC.)
- FY2025 10-K: -in-class portfolio rent escalations, stable rent collections, minimal credit losses, strong lease rollover outcomes, accretive recycling, and revenue generating capital expenditures with existing tenants, (2) build-to-suit developments, and (3) a diversified acquisition pipeline. We focus on investing in real estate…
- FY2025 10-K: …the basis of maximizing profits. The IRS may treat sale-leaseback transactions as loans, which could jeopardize our REIT status or require us to make an unexpected distribution. We may purchase properties and lease them back to the sellers of such properties. The IRS may take the position that certain of these…
- REG (REGENCY CENTERS CORPORATION)
- FY2025 10-K: …• Net Operating Income ("NOI") is the sum of base rent, percentage rent, termination fee income, tenant recoveries, other lease income, and other property income, less operating and maintenance expenses, real estate taxes, ground rent, termination expense, and uncollectible lease income. NOI excludes straight-line…
- FY2025 10-K: 2025 2024 Assets Net real estate investments: Real estate assets, at cost $ 14,561,924 13,698,419 Less: accumulated depreciation 3,267,728 2,960,399 Real estate assets, net 11,294,196 10,738,020 Investments in sales-type leases, net 16,727 16,291 Investments in real estate partnerships 349,856 399,044 Net real estate…
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.
- Economic-unit decomposition (SOTP): each disclosed business unit is assigned its native valuation basis before any multiple is applied. Operating units are valued on enterprise value; funded financial units are valued on their own common equity, because their borrowings fund earning assets rather than levering the parent. A company total is stated only once every material unit carries a supported value and the parent capital bridge reconciles.
- 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
NNN Q1 2026 results, 8-K · NNN Q1 2026 8-K guidance update · analyst notes, Morgan Stanley and BofA, 2026