Curbline Properties (CURB): Assessing Valuation After $250 Million Share Buyback Announcement

Curbline Properties (NYSE:CURB) has unveiled a share repurchase program, authorizing up to $250 million in buybacks. This move often reflects management’s belief in the company’s long-term value and can impact how investors view the stock’s outlook.

See our latest analysis for Curbline Properties.

The announcement of a $250 million buyback comes as Curbline Properties’ 1-year total shareholder return clocks in at a modest 1.3%, with the share price edging higher in the short term. Although the stock hasn’t delivered outsized gains, momentum appears to be building gradually as management demonstrates confidence with this new repurchase plan.

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This leaves investors asking a critical question: Is Curbline Properties trading at an attractive discount with room for further gains, or has the market already factored in its future growth prospects?

Price-to-Earnings of 146.3x: Is it justified?

Curbline Properties is currently valued at a striking price-to-earnings (P/E) ratio of 146.3x, far above its sector peers and current share price of $22.89. This sharp figure suggests the market is pricing in significant optimism or overlooking underlying challenges.

The P/E ratio compares the company’s market price to its earnings per share, offering a lens into how much investors are willing to pay for future profits. For retail REITs, a sector where stable, predictable earnings are valued, such an elevated P/E stands out.

This multiple is not only well above the US Retail REITs industry average of 25.5x, but it also exceeds the peer average of 52.7x and is much higher than the estimated fair P/E ratio of 36.2x. The market may be overly enthusiastic, or it could be underestimating profit headwinds and volatility given the company’s recent one-off losses and management transitions.

Explore the SWS fair ratio for Curbline Properties

Result: Price-to-Earnings of 146.3x (OVERVALUED)

However, slowing net income growth and recent management changes could put pressure on Curbline Properties’ premium valuation if near-term results disappoint.

Find out about the key risks to this Curbline Properties narrative.

Another View: DCF Model Shows Deep Discount

While the market’s price-to-earnings ratio paints Curbline Properties as expensive, the Simply Wall St DCF model presents a very different picture. According to this approach, shares are trading nearly 59% below their estimated fair value, which suggests a notable undervaluation. Could the market be missing something significant here?

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Curbline Properties for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own Curbline Properties Narrative

If you see things differently or want to dig into the numbers yourself, it’s quick and easy to form your own perspective in just a few minutes. Do it your way.

A great starting point for your Curbline Properties research is our analysis highlighting 2 key rewards and 3 important warning signs that could impact your investment decision.

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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.

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