• Wondering if CBL & Associates Properties at around US$43.95 is still good value after its recent run, or if most of the easy gains are already behind it.
• The stock has had a strong stretch, with a 19.0% return year to date and 91.9% over the last year, although the past week showed a 2.4% decline after a 7.2% gain in the last 30 days.
• Recent coverage has focused on CBL & Associates Properties as a retail focused real estate investment trust, with investors paying attention to how it is positioned in U.S. shopping centers and malls. Commentary has also highlighted how sentiment toward retail property has evolved, which helps explain some of the shifts in the share price.
• Right now, CBL & Associates Properties has a valuation score of 3/6. The next sections will break that down using several valuation methods, before finishing with a broader way to think about what those numbers really mean for you.

Approach 1: CBL & Associates Properties Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow model looks at the cash CBL & Associates Properties is expected to generate in the future, then discounts those amounts back to today using a required rate of return. In this case, the model uses adjusted funds from operations to estimate free cash flow to equity in two stages.

The latest twelve month free cash flow figure is $223.566 million. Analysts provide forecasts out to 2027, with free cash flow for that year estimated at $139.732 million. After that, Simply Wall St extrapolates cash flows out to 2035, with projected free cash flow in 2035 of $118.811 million, all discounted back to today in dollar terms.

Putting those projections together, the DCF model arrives at an estimated intrinsic value of $48.47 per share, compared with a current share price of about $43.95. That implies the stock is 9.3% “undervalued,” which is a relatively small gap and within the margin of uncertainty that is common for valuation models.

Result: ABOUT RIGHT

CBL & Associates Properties is fairly valued according to our Discounted Cash Flow (DCF), but this can change at a moment's notice. Track the value in your watchlist or portfolio and be alerted on when to act.

Approach 2: CBL & Associates Properties Price vs Earnings

For a profitable company, the P/E ratio is a straightforward way to think about value because it connects what you pay for each share with the earnings that support that price. In general, higher growth expectations or lower perceived risk can support a higher “normal” P/E. In contrast, slower growth or higher risk usually means a lower one is more appropriate.

CBL & Associates Properties currently trades on a P/E of 10.16x. This sits well below the Retail REITs industry average P/E of about 23.99x and also below the broader peer average of 32.58x. On the surface, that gap suggests the stock trades at a discount to many other companies in similar areas of the market.

Simply Wall St’s Fair Ratio for CBL & Associates Properties is 8.20x. This is a proprietary estimate of what the P/E “should” be, given factors such as earnings growth, industry, profit margin, market cap and company specific risks. Because it is tailored to the company’s profile, the Fair Ratio can give a more focused signal than a simple comparison with peers or the industry. With the actual P/E of 10.16x sitting above the Fair Ratio of 8.20x, the stock screens as somewhat expensive on this measure.

Result: OVERVALUED

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Upgrade Your Decision Making: Choose your CBL & Associates Properties Narrative

Earlier it was mentioned that there is an even better way to think about valuation, so Narratives are introduced here as your way of attaching a clear story to the numbers. They link your view on CBL & Associates Properties future revenue, earnings and margins to a forecast and then to a fair value estimate.

A Narrative on Simply Wall St is your structured perspective on a company. You set your assumptions, see how they translate into a financial forecast, and compare the resulting Fair Value with the current share price to help decide whether you are closer to buying, holding or selling.

These Narratives live in the Community page on Simply Wall St and are used by millions of investors. They update automatically when fresh information such as earnings or key news is added, so your fair value view stays aligned with what is happening without you rebuilding every model from scratch.

For example, one CBL & Associates Properties Narrative might assume more conservative margins and a lower fair value, while another uses higher long term revenue assumptions and arrives at a much higher fair value. This shows how different investors can reasonably reach very different conclusions from the same stock price.

Do you think there's more to the story for CBL & Associates Properties? Head over to our Community to see what others are saying!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.