NNN
NNN
HOLD 2026-03-07
Model
DDM
Price at Report
$45.12
Base IV
$43.35
Bear IV
$37.41
Bull IV
$50.67
Entry Zone: 39-40 · Sell Above: 43
Bore Family Office
Valuation Report — NNN REIT (NNN) • March 7, 2026
3-Stage DDM (Ke) • Discount Rate: 8.30% • Current Price: $45.12
Prepared by Lurch • Bore Family Office • Data: Finnhub, StockAnalysis.com, S&P Global Market Intelligence
🏢 Business Overview
NNN REIT (formerly National Retail Properties) was founded in 1984 and is one of the largest net-lease REITs in the United States. The company owns approximately 3,550 properties leased under long-term net leases (average 18 years remaining) across 49 states. Tenants are responsible for taxes, insurance, and maintenance — creating a highly predictable, bond-like income stream. Top tenant concentrations include convenience/gas retail (~17%), casual dining restaurants (~12%), family dining (~6%), automotive service (~5%), and home improvement (~5%). NNN operates a pure-play net-lease model with no development risk — it acquires existing properties from retail operators through sale-leaseback transactions. Revenue has grown consistently (~6-7%/yr) through acquisitions and modest rent escalators (~1.5%/yr contractual increases). The portfolio has never had occupancy below 96% in 37 years. However, the current portfolio is more consumer-cyclically exposed than peers like O (Realty Income), with heavier concentration in casual dining and automotive — sectors facing secular pressure.📊 Financial Snapshot
| Metric | FY2021 | FY2022 | FY2023 | FY2024 | FY2025 |
|---|---|---|---|---|---|
| Revenue ($M) | $726 | $773 | $828 | $869 | $926 |
| EBITDA ($M) | $654 | $706 | $794 | $828 | $858 |
| Operating Income ($M) | $449 | $483 | $555 | $578 | $589 |
| Net Income ($M) | $264 | $335 | $392 | $397 | $390 |
| EPS (diluted) | $1.51 | $1.89 | $2.16 | $2.15 | $2.07 |
| Free Cash Flow ($M) | $215 | — | — | $563 | — |
| Annual DPS | $2.100 | $2.160 | $2.230 | $2.290 | $2.360 |
| Total Debt ($M) | — | — | — | — | — |
| Rev YoY Growth | — | +6.5% | +7.1% | +5.0% | +6.6% |
📈 DDM Scenarios
$37
🔴 Bear
$43
📊 Base
$51
🚀 Bull
$45.12
Current Price
$43
Analyst Avg PT
📋 Full 10-Year Projection Tables
Bear Scenario
| Period | Stage | DPS / Dist. | PV of DPS | Cumulative IV |
|---|---|---|---|---|
| Year 1 | Stage 1 | $2.436 | $2.249 | $2.25 |
| Year 2 | Stage 1 | $2.473 | $2.108 | $4.36 |
| Year 3 | Stage 1 | $2.510 | $1.976 | $6.33 |
| Year 4 | Stage 1 | $2.547 | $1.852 | $8.18 |
| Year 5 | Stage 1 | $2.585 | $1.735 | $9.92 |
| Year 6 | Stage 2 | $2.624 | $1.626 | $11.55 |
| Year 7 | Stage 2 | $2.664 | $1.524 | $13.07 |
| Year 8 | Stage 2 | $2.704 | $1.429 | $14.50 |
| Year 9 | Stage 2 | $2.744 | $1.339 | $15.84 |
| Year 10 | Stage 2 | $2.785 | $1.255 | $17.09 |
| Terminal | — | TV=$45.10 | PV(TV)=$20.32 (54% of IV) |
Base Scenario
| Period | Stage | DPS / Dist. | PV of DPS | Cumulative IV |
|---|---|---|---|---|
| Year 1 | Stage 1 | $2.472 | $2.283 | $2.28 |
| Year 2 | Stage 1 | $2.546 | $2.171 | $4.45 |
| Year 3 | Stage 1 | $2.623 | $2.065 | $6.52 |
| Year 4 | Stage 1 | $2.701 | $1.964 | $8.48 |
| Year 5 | Stage 1 | $2.782 | $1.867 | $10.35 |
| Year 6 | Stage 2 | $2.852 | $1.767 | $12.12 |
| Year 7 | Stage 2 | $2.923 | $1.673 | $13.79 |
| Year 8 | Stage 2 | $2.996 | $1.583 | $15.37 |
| Year 9 | Stage 2 | $3.071 | $1.498 | $16.87 |
| Year 10 | Stage 2 | $3.148 | $1.418 | $18.29 |
| Terminal | — | TV=$55.63 | PV(TV)=$25.06 (58% of IV) |
Bull Scenario
| Period | Stage | DPS / Dist. | PV of DPS | Cumulative IV |
|---|---|---|---|---|
| Year 1 | Stage 1 | $2.508 | $2.316 | $2.32 |
| Year 2 | Stage 1 | $2.621 | $2.235 | $4.55 |
| Year 3 | Stage 1 | $2.739 | $2.156 | $6.71 |
| Year 4 | Stage 1 | $2.862 | $2.080 | $8.79 |
| Year 5 | Stage 1 | $2.991 | $2.007 | $10.79 |
| Year 6 | Stage 2 | $3.096 | $1.919 | $12.71 |
| Year 7 | Stage 2 | $3.204 | $1.833 | $14.55 |
| Year 8 | Stage 2 | $3.316 | $1.752 | $16.30 |
| Year 9 | Stage 2 | $3.432 | $1.675 | $17.97 |
| Year 10 | Stage 2 | $3.552 | $1.600 | $19.57 |
| Terminal | — | TV=$69.03 | PV(TV)=$31.10 (61% of IV) |
🔲 Sensitivity Table
| Ke \ gT | 1.5% | 2.0% | 2.5% | 3.0% | 3.5% |
|---|---|---|---|---|---|
| 6.3% | $56 | $61 | $66 | $73 | $83 |
| 6.8% | $51 | $54 | $59 | $64 | $71 |
| 7.3% | $46 | $49 | $52 | $56 | $62 |
| 7.8% | $43 | $45 | $47 | $51 | $54 |
| 8.3% | $39 | $41 | $43 | $46 | $49 |
| 8.8% | $37 | $38 | $40 | $42 | $44 |
| 9.3% | $34 | $36 | $37 | $39 | $41 |
| 9.8% | $32 | $33 | $34 | $36 | $37 |
| 10.3% | $30 | $31 | $32 | $33 | $35 |
Green = >10% above current price. Red = >10% below. Gold = within ±10%.
📉 Long-Term Price Trend Channel
Log-linear trend fitted to full price history. ±1.5σ bands. Green shaded zone = bottom 25% of historical range — historically attractive entry.
🏦 Comparable Valuation
| Ticker | Company | P/AFFO | Div Yield | Lease Type | Streak |
|---|---|---|---|---|---|
| NNN | NNN REIT (current) | 13.7x | 5.33% | Net Lease | 37 yrs |
| O | Realty Income | 14.2x | 4.98% | Net Lease | 22 yrs |
| VICI | VICI Properties | 12.8x | 5.8% | Net Lease | — |
| WP | W.P. Carey | 11.5x | 6.0% | Net Lease | — |
| EPRT | Essential Properties Realty | 13.0x | 4.2% | Net Lease | — |
| NNN | 5-yr avg (own history) | 15.0x | 4.8% | — | — |
💰 Dividend / Distribution Analysis
| Metric | Value |
|---|---|
| Annual DPS | $2.400 |
| Current Yield | 5.33% |
| Consecutive Growth Years | 37 |
| 1-yr DPS CAGR | +3.1% |
| 3-yr DPS CAGR | +3.0% |
| 5-yr DPS CAGR | +2.5% |
| 10-yr DPS CAGR | +3.0% |
| Payout Ratio (DPS/EPS) | 116.0% ⚠️ |
| FCF Payout Ratio | 71.0% |
| Sustainability Verdict | Safe ✅ |
NNN REIT has raised its dividend for 37 consecutive years — one of the longest streaks among all REITs. The EPS payout ratio of 116% looks alarming but is irrelevant for REITs — net income excludes D&A which is a non-cash charge. AFFO payout ratio of ~71% (estimated $3.30 AFFO/share) is healthy and well within the sustainable range for a net-lease REIT (typically 70-80%). Occupancy of ~99% and 18-year weighted average lease terms provide excellent visibility. Dividend is Safe; growth of ~3%/yr is expected to continue as long as tenant credit quality holds.
🔮 Analyst Forecast Section
(a) EPS Consensus
| Year | Low / Actual | Avg | High | # Analysts | Type |
|---|---|---|---|---|---|
| FY2023 | $2.16 | — | — | — | Actual |
| FY2024 | $2.15 | — | — | — | Actual |
| FY2025 | $2.07 | — | — | — | Actual |
| FY2026E | $2.00 | $2.08 | $2.17 | 9 | Estimate |
| FY2027E | $2.07 | $2.16 | $2.28 | 7 | Estimate |
(b) Revenue Consensus
| Year | Low / Actual | Avg | High | # Analysts | Type |
|---|---|---|---|---|---|
| FY2023 | $0.8B | — | — | — | Actual |
| FY2024 | $0.9B | — | — | — | Actual |
| FY2025 | $0.9B | — | — | — | Actual |
| FY2026E | $0.9B | $1.0B | $1.0B | 9 | Estimate |
| FY2027E | $0.9B | $1.0B | $1.1B | 7 | Estimate |
(c) Individual Analyst Price Targets
Consensus: Avg $43.33 | Range $43–$44
| Analyst | Firm | Rating | PT | Upside |
|---|---|---|---|---|
| John Kilichowski | Wells Fargo | Hold | $44 | -2.5% |
| Nate Crossett | BNP Paribas | Sell | $44 | -2.5% |
| John Massocca | B. Riley | Hold | $43 | -4.7% |
| Michael Goldsmith | UBS | Hold | $43 | -4.7% |
| James Kammert | Evercore ISI | Hold | $43 | -4.7% |
(d) Earnings Surprise History
| Quarter | EPS Act vs Est | EPS Beat/Miss | Rev Act vs Est | Rev Beat/Miss | Guidance |
|---|---|---|---|---|---|
| Q2 FY2025 | $0.54 vs $0.53 | +$0.01 ✅ | $0.2B vs $0.2B | +$0.0B ✅ | Maintained |
| Q3 FY2025 | $0.53 vs $0.52 | +$0.01 ✅ | $0.2B vs $0.2B | +$0.0B ✅ | Maintained |
| Q4 FY2025 | $0.50 vs $0.52 | $-0.02 ❌ | $0.2B vs $0.2B | +$0.0B ✅ | Maintained |
| Q1 FY2026 | $0.52 vs $0.52 | +$0.00 ✅ | $0.2B vs $0.2B | +$0.0B ✅ | Stable |
(e) Confidence Band Commentary
Analyst coverage is very thin (6 analysts) — unusually narrow for a $8.5B market cap REIT. All 6 analysts rate Hold with nearly identical PTs ($43–44), suggesting low conviction in either direction. The narrow analyst range implies high predictability of earnings (net-lease cash flows are bond-like). Current price of $45.12 trades at a ~4% PREMIUM to analyst consensus PT of $43.33 — the stock appears slightly overvalued at current levels versus Street views.
⚖️ DDM Verdict: HOLD — NNN REIT (NNN)
Current price: $45.12 | Analyst Avg PT: $43.33
$37
🔴 Bear
$43
📊 Base
$51
🚀 Bull
| Tier | Price | Action |
|---|---|---|
| Tier 1 — Starter | ≤$40 | Begin position |
| Tier 2 — Add | ≤$40 | Add on weakness |
| Tier 3 — Full | ≤$39 | Full allocation |
| Sell Alert | ≥$43 | Above fair value — consider trimming |
📂 Current Position Summary
| Metric | Value |
|---|---|
| Shares Held | 5,224.87 |
| Average Cost Basis | $40.06 |
| Current Market Value | $235,746 |
| Unrealized P&L | $+26,438 (+12.6%) |
| Annual Dividend Income | $0/yr |
| Yield on Cost | 0.00% |
| vs Target Position (~$200K) | $235,746 vs $200,000 (118% of target) |
Bore Family Office • Analysis generated by Lurch • Not investment advice.