REIT - Industrial · NYSE
Current Price
$198.13
Intrinsic Value
Use the calculator below to estimate
Run a full DCF analysis on EastGroup Properties, Inc. with auto-filled fundamentals, adjustable assumptions, and sensitivity heatmap.
EastGroup Properties, Inc. (NYSE: EGP), an S&P MidCap 400 company, is a self-administered equity real estate investment trust focused on the development, acquisition and operation of industrial properties in major Sunbelt markets throughout the United States with an emphasis in the states of Florida, Texas, Arizona, California and North Carolina. The Company's goal is to maximize shareholder value by being a leading provider in its markets of functional, flexible and quality business distribution space for location sensitive customers (primarily in the 15,000 to 70,000 square foot range). The Company's strategy for growth is based on ownership of premier distribution facilities generally clustered near major transportation features in supply-constrained submarkets. EastGroup's portfolio, including development projects and value-add acquisitions in lease-up and under construction, currently includes approximately 45.8 million square feet.
ROIC (TTM)
5.4%
ROE (TTM)
8.4%
FCF Yield
3.92%
The intrinsic value of EGP depends on assumptions about future growth rate, discount rate (WACC), and terminal value. A DCF model discounts projected free cash flows back to present value — small changes in WACC can shift the estimate by 20% or more, which is why sensitivity analysis is essential.
Whether EGP is undervalued depends on comparing the DCF-derived intrinsic value to the current market price of $198.13. A positive margin of safety (intrinsic value above market price) suggests potential undervaluation, but the degree of confidence depends on the reliability of your growth and discount rate assumptions.
To perform a DCF valuation on EastGroup Properties, Inc.: (1) Start with the trailing free cash flow per share as the base, (2) project future FCF growth over 5-10 years based on REIT - Industrial industry trends and company fundamentals, (3) apply a discount rate (WACC) reflecting EGP's risk profile, and (4) add a terminal value for cash flows beyond the projection period.
DCF (Discounted Cash Flow) estimates what a company is worth today based on its future cash generation. For EastGroup Properties, Inc., this means projecting how much free cash flow the REIT - Industrial will produce over the next 5-10 years, then discounting those amounts to today's dollars. EGP's ROIC of 5.4% suggests the company may face challenges generating returns above its cost of capital.
WACC (Weighted Average Cost of Capital) is the discount rate in a DCF model — it reflects the minimum return investors require. For EGP, the capital structure and equity risk premium determine WACC. A 1% increase in WACC typically reduces the intrinsic value by 10-15%.
