Four Corners Property Trust, Inc. (FCPT) stock intrinsic value fair value estimate & owner earnings analysis

Four Corners Property Trust owns 1,303 free-standing restaurant and retail properties in 48 states, leased on a net basis, meaning tenants pay property taxes, insurance and upkeep. It was spun out of Darden Restaurants in 2015. Darden is still the biggest tenant at 44.7% of scheduled base rent (about $118 million of $264 million), with Olive Garden alone at 31.7%. Occupancy is 99.6%, weighted remaining lease term is 6.9 years, and contractual rent steps average 1.5% a year through 2030. How we measure earnings. We start from operating cash flow, subtract stock compensation, and strip out swings in working items such as rent received in advance. Purchases of real estate ($325.5 million in 2025) are treated as discretionary acquisitions, not upkeep, because tenants maintain the buildings; counting them as upkeep would erase earnings that the business does not actually have to spend. On this basis owner earnings per share rose in every one of the last nine years, from $1.20 in 2016 to $1.70 in 2025 (about 3.9% a year), with 2025 growing 2.4%. We anchor on the median of 2023 to 2025, $1.66 per share, rather than the latest year alone. Base case: $27.38 per share. Year one grows 1.8%, below 2025's 2.4%. The only growth credited is the contractual rent steps, net of rising overhead. Against that we deduct a known headwind: $625 million of fixed-rate notes and $590 million of term loans, much of it hedged or borrowed at low rates, must be refinanced between 2026 and 2032. Using the 6.44% rate on the notes issued in July 2023 as the replacement cost, we estimate this trims earnings by about $19 million a year by 2032. We assume Darden renews its leases when the initial terms end around 2030 (the trust estimates tenant rent coverage of roughly 6 times for Olive Garden and LongHorn), and that earnings then stay flat with no growth credit. Bear case: $25.23 per share. Darden holds the right to choose which properties to renew, and its leases average 4.8 years remaining. We assume it lets 40% of its rent lapse in 2030 to 2032, the space sits empty for about 18 months costing rent and carrying costs, re-tenanting costs $15 million, and re-let rent is 25% lower. The debt refinancing headwind is the same as in the base case. Bull case: $35.17 per share. Rent steps continue at 1.5% on renewed leases through 2040 (management reports renewals have often come at contractual increases), and acquisitions add 1.5% a year to per-share earnings for ten years, well below the 3.9% a year that per-share earnings have grown over the past nine years. That growth is funded by selling new shares (8.2 million shares were sold in 2025 at about $28) and borrowing, not by the trust's own cash, which is why it appears only in this case. What was left out: acquisitions in the base and bear cases, because they depend on future funding and new shares, and a full year of rent from properties bought during 2025, which the anchor does not include. What could make this wrong: Darden's health matters more than any other factor, and renewal terms are not yet visible. Share count has grown from about 60 million to 103 million since 2016, so returns depend on continued access to capital at good prices. Higher long-term borrowing costs than the 6.44% assumed would lower all three cases. The margin-of-safety price of $17.50 is about 36% below the base value and 30% below the bear value, reflecting the tenant concentration and debt, and is set at a level where current earnings represent a yield of about 9.5% before any growth.