STAG Industrial, Inc. (STAG): what the price requires
At today's price, STAG Industrial, Inc. (STAG) is priced for +6.0% 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/STAG
Headline
| Field | Value |
|---|---|
| Ticker | STAG |
| Company | STAG Industrial, Inc. |
| Sector / Industry | Real Estate |
| Current price | $39.09/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 | 6.0% |
| Price-to-FFO | 13.0x |
| FFO yield | 7.7% |
Solve inputs: computed at a 9.6% cost of equity with 4% terminal growth over a 5-year stage; each 1pp of cost of equity moves the implied growth ~4.2pp.
How unusual the bet is: within-range
| Reference | Value |
|---|---|
| vs own history | -0.08σ |
| cohort percentile (of 88 peers) | 72 |
| sustained it ~5 years at this level | 66% |
| 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 | 3.11x | 4 | expensive |
| Earnings | 2.50x | 4 | expensive |
| Relative | 1.26x | 6 | expensive |
| Growth | 1.26x | 3 | expensive |
Families that call it expensive: Asset, Earnings
The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 6.7%); the inversion above states its own rate.
Per-Model Detail (n=17)
| Model | Family | FV | Price/FV | Applicable | Methodology |
|---|---|---|---|---|---|
| DCF Perpetual Growth | Growth | $55.52 | 0.70x | yes | FCF base $0.5B, growth 10% (input: historical growth), terminal g 4.0%, WACC 6.7%, 6yr projection |
| DCF Exit Multiple | Growth | $31.02 | 1.26x | yes | Exit EV/EBITDA: 32.8x / 34.8x / 36.8x (bear / base = today's held flat / bull), 6yr |
| Relative Valuation | Relative | $50.66 | 0.77x | yes | P/E 26.2x (blended: static sector reference 35x + trailing (TTM) 13x), scenarios: 21.8x / 26.2x / 30.6x (bear / base = reference held flat / bull), EV/EBITDA 24.44x |
| Simple DDM | Growth | — | — | no | — |
| Two-Stage DDM | Growth | — | — | no | — |
| Simple Excess Return | Asset | $13.80 | 2.83x | yes | BV/sh $19.16, ROE (TTM) 6.7%, ke 9.3% |
| Two-Stage Excess Return | Asset | $11.56 | 3.38x | yes | 5yr excess ROE then converge to ke=9.3% |
| Discounted Future Market Cap | Growth | $18.10 | 2.16x | yes | Rev $0.9B, growth 10% (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 | $36.12 | 1.08x | yes | FFO/share $3.01, growth 2% (input: historical FFO/share growth, 10y median), PEG=12.31 (Overvalued) |
| Margin Trajectory | Growth | — | — | no | — |
| Earnings Power Value | Earnings | — | — | no | — |
| Residual Income | Asset | $11.25 | 3.47x | yes | BV $19.16 + 5yr PV of (ROE (TTM) 6.7% − Kₑ 9.3%) × BV; BV grows 4.3%/yr |
| Graham Number | Asset | $36.02 | 1.09x | yes | √(22.5 × FFO/share $3.01 × BVPS $19.16) — Graham's conservative floor |
| EV/EBITDA Relative | Relative | $15.35 | 2.55x | yes | EBITDA $0.31B × sector EV/EBITDA 20.0x |
| FCF Yield | Earnings | $10.27 | 3.81x | yes | FCF $477.3M / Kₑ 9.3% — zero-growth perpetuity |
| SBC-Adj FCF Yield | Earnings | $9.54 | 4.10x | yes | SBC-adj FCF $0.46B (FCF $0.48B − SBC $0.01B) capitalized at Kₑ |
| Ben Graham Formula | Earnings | $34.00 | 1.15x | yes | FFO/share $3.01 × (8.5 + 2×2.5%) × (4.4 / 5.3%) |
| ROIC-Justified P/B | Asset | — | — | no | — |
| P/Sales Sector | Relative | $27.10 | 1.44x | yes | Revenue $0.86B × sector P/S 6.0x |
| PEG Fair Value | Relative | $15.05 | 2.60x | yes | FFO/share $3.01 × (PEG 1.5 × growth 2.5% (input: historical FFO/share growth, 10y median)) → PE 3.7x |
| Earnings Yield | Earnings | $32.54 | 1.20x | yes | FFO/share $3.01 / required return 9.3% (Rf 4.3% + ERP 5.0%) |
| Funds From Operations Multiple | Relative | $42.71 | 0.92x | yes | FFO/share $3.01 × 14.2x P/FFO (route cohort median, n=85); FFO $0.58B (FFO incl. D&A + impairments, FY2025, companyfacts), shares 191M |
| Clinical Phase NPV | Growth | — | — | no | — |
| Merton | Asset | — | — | no | — |
| V5 Mechanical | — | — | — | no | — |
Solvency
| Field | Value |
|---|---|
| Funds from operations (trailing) | $576.0m |
| Share count CAGR (dilution) | 1.8% |
| 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. Net debt could not be resolved from the corporate debt tags in the filings (REIT notes and mortgage debt are often tagged outside the corporate ladder), so the leverage ratio is withheld rather than rendered from incomplete tags. Interest expense is not separately reported in the cached statements, so fixed-charge coverage cannot be computed.
Bullet Takeaways
- STAG owns a granular single-tenant industrial portfolio where no tenant is more than about 2.8% of rent, running roughly 96.6% occupancy and posting record first-quarter cash leasing spreads near 21%, with new demand from data-center-related tenants.
- The biggest risk is the balance sheet and the price together: net debt near 5.55 times FFO with a March 2027 term-loan maturity to refinance, and a stock at about $38.99 where the FFO multiple method lands near $41, essentially no discount.
- Watch the second-quarter occupancy trough management flagged, whether leasing spreads stay wide as in-place rents catch up to market, and refinancing costs against the roughly $3.2 billion net-debt load; the dividend yields about 3.8% and is covered at roughly 76% of adjusted FFO.
Bull Case
The obvious worry about STAG is that single-tenant industrial buildings are commodity real estate exposed to any one tenant walking away. Start there, because the data undercuts the fear. The 10-K shows a portfolio deliberately spread thin: no single tenant is "more than approximately 2.8% of our total annualized base rental revenue and no single industry accounting for more than approximately 11.4% of our total annualized" base rent. That diversification turns the single-tenant model from a concentration risk into a granular, diversified rent stream where no one departure moves the needle much. Same-store occupancy of about 96.6% in the first quarter says the buildings stay leased.
The leasing economics are the engine, and they are running hot. In the first quarter STAG posted cash leasing spreads of about 20.9% and straight-line spreads near 39.6%, a quarterly record for square footage leased across the operating portfolio, and core funds from operations rose 6.6% to about $0.65 per share. Those spreads mean expiring leases are being renewed or re-let at meaningfully higher rents, the clearest evidence that STAG's in-place rents sit below market. The 10-K frames the structural tailwind as "the shortening and fattening of the supply chain", the reshoring and inventory-rebuilding trend that keeps industrial demand firm.
New demand is arriving from an unexpected direction. STAG signed eight leases totaling about 1.6 million square feet to data-center-related tenants in the quarter, a new source of demand for industrial space, and it carried a roughly $3.9 billion acquisition pipeline against 2026 guidance for $350 million to $650 million of acquisitions. The income is real and covered: the dividend of about $1.52 per share yields roughly 3.8%, and it takes only about 49% of funds from operations and about 76% of the stricter adjusted funds from operations, after maintenance capex. A REIT re-letting space at 20%-plus spreads, filling it to 96%, and paying a well-covered growing dividend is doing the industrial playbook well.
Bear Case
The balance sheet is where a REIT's fragility hides, and STAG's is the place to press. Net debt of about $3.2 billion runs roughly 5.55 times funds from operations, and the 10-K makes clear the company's borrowing capacity is tethered to covenants: its ability to "borrow, maintain borrowings and avoid default under our unsecured credit facility, unsecured term loans, and unsecured notes is subject to our ongoing" compliance. A REIT grows by issuing debt and equity to buy buildings, so a period of higher rates or tighter credit does not just slow growth, it can force a REIT to fund at dilutive terms or pause acquisitions entirely. With a $3.9 billion pipeline against only $350 million to $650 million of planned 2026 acquisitions, most of that pipeline depends on financing that may not stay cheap.
The maturity wall is a specific pressure. The 10-K notes that STAG's Unsecured Term Loan F carries an "initial maturity date of March 25, 2027", and near-term maturities in a higher-rate environment mean refinancing at coupons above the expiring debt, which pressures funds from operations per share even as the buildings perform. Fixed-charge coverage near 5.3 times gives cushion, but the arithmetic of refinancing at higher rates is a headwind the leasing spreads have to keep outrunning.
Then there is what the price already assumes. At about $38.99 (July 10, 2026), no valuation family reaches the price. On the headline metric this engine inverts, adjusted funds from operations, the stock trades at a full price-to-AFFO multiple, and the funds-from-operations multiple method lands near $41, essentially at the price with no discount. The asset and earnings-power methods sit well below. The dividend has barely grown, up only about 0.2% a year over five years on a per-share basis, so the total-return case rests almost entirely on FFO growth and multiple stability, not on a rising payout. Management itself expects occupancy to trough in the second quarter, and if the record leasing spreads normalize as in-place rents catch up to market, the FFO growth that justifies the multiple slows. The bet the price makes is that industrial demand stays firm, spreads stay wide, and refinancing costs stay manageable, all at once, with the stock priced for it to work.
Valuation
For an industrial REIT the right lens is adjusted funds from operations, the cash a REIT actually has after the recurring capital it must spend to keep buildings leased, and on that basis STAG is priced full. At $38.99 (July 10, 2026), the funds-from-operations multiple method, using FFO per share of about $3.01 and a route-cohort median multiple around 13.5 times, lands near $41, essentially at the price. The dividend of about $1.52 covers only roughly 49% of FFO and about 76% of the stricter adjusted FFO after maintenance capex, so the payout is safe, but the price sits at a level where no method offers a discount. The asset methods, on book value of $19.16 per share, and the earnings-power methods land well below, near $10 to $14, because a REIT's depreciation-driven accounting understates asset value while the cash-flow multiple carries the real weight.
The most concrete framing is the growth the multiple needs. STAG grew core FFO about 6.6% in the first quarter on record leasing spreads of roughly 21% cash, and 2026 guidance calls for core FFO of $2.60 to $2.64 per share with same-store cash NOI growth of 2.75% to 3.25%. The price works if those spreads and that NOI growth persist; it weakens if occupancy troughs deeper than expected, which management already signals for the second quarter, or if the leasing spreads normalize as in-place rents rise toward market.
Solvency for a REIT is read against funds from operations, not depreciation-gutted operating income. Net debt of about $3.2 billion runs roughly 5.55 times FFO, fixed-charge coverage is near 5.3 times, and the 10-K flags near-term maturities including Unsecured Term Loan F maturing in March 2027 that will refinance at current rates. The dividend is well covered, but the share count has grown about 1.8% a year, the ordinary equity issuance a REIT uses to fund acquisitions, so per-share growth has to overcome that dilution. A buyer at today's price is underwriting continued firm industrial demand, wide leasing spreads, and manageable refinancing, with the FFO multiple already at fair value and the dividend growing barely at all.
Catalysts
The first-quarter 2026 report on April 29 was the key recent print: core FFO of about $0.65 per share, up 6.6% year over year, same-store cash NOI up about 4.1%, and record leasing volume with cash spreads near 20.9% and straight-line spreads near 39.6%. STAG also signed eight leases totaling about 1.6 million square feet to data-center-related tenants, a new demand source, and set a second-quarter dividend of about $0.3875. Full-year 2026 guidance calls for core FFO of $2.60 to $2.64 per share, same-store cash NOI growth of 2.75% to 3.25%, and $350 million to $650 million of acquisitions against a roughly $3.9 billion pipeline.
The near-term watch items are specific. Management expects occupancy to trough in the second quarter before improving in the back half, so the next quarterly report is the checkpoint on whether that trough is shallow. The forces that matter into 2026 are the durability of the wide leasing spreads as in-place rents rise toward market, the pace of acquisitions converting the pipeline, and refinancing terms on near-term maturities, all of which drive the FFO growth the valuation depends on.
Peer Cohorts (Per Segment, With Filing Citations)
STAG Industrial (consolidated) (reported)
- EGP (EASTGROUP PROPERTIES, INC.)
- (no filing in the citation store)
- PLD (Prologis, Inc.)
- (no filing in the citation store)
- FR (FIRST INDUSTRIAL REALTY TRUST, INC.)
- (no filing in the citation store)
- REXR (Rexford Industrial Realty, Inc.)
- (no filing in the citation store)
- LXP (LXP INDUSTRIAL TRUST)
- (no filing in the citation store)
- TRNO (Terreno Realty Corporation)
- (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
Q1 2026 earnings release, April 2026 · Q1 2026 earnings call, April 2026 · Q1 2026 earnings call · Q1 2026 earnings release and call, April 2026