Farmland Partners Inc. (FPI) stock intrinsic value fair value estimate & owner earnings analysis

Farmland Partners is a real estate company that owns about 71,600 acres of U.S. farmland (roughly 60% row-crop land such as corn, soybeans, wheat, rice and cotton, and 40% specialty-crop land such as almonds, pistachios, citrus and avocados) and rents it to farmers. Tenants generally pay the operating costs of the land, so the company's cash flow is mostly rent, plus interest on loans it makes to farmers, some crop sales from farms it operates itself, and solar and wind lease income on a handful of farms. It also owns four John Deere dealership properties in Ohio. What the business actually earns. We measure owner earnings as operating cash flow, minus working-capital swings, minus stock compensation, minus the part of farm-improvement spending needed to keep the land productive. On that basis the company earned about $0.22 to $0.32 per share in most recent years (2021: $0.22, 2022: $0.27, 2024: $0.22, 2025: $0.32), with 2023 a low of $0.07 when cash interest reached $22.5 million and improvements reached $5.8 million. Purchases of additional farms are treated as discretionary growth and are not deducted. Because Series B preferred stock converted to common in 2021, we look at 2021 to 2025. The 2025 dollar figure of about $16.6 million is not a clean guide to the future for three reasons: (1) the company sold farms in 2024 and 2025 and rental income fell 23.7% in 2025; (2) on December 11, 2025 it swapped 23 Corn Belt farms for 31,000 preferred units (a $10.5 million gain that does not recur); and (3) in February 2026 it redeemed the remaining 68,000 preferred units for $68.2 million using borrowed money. That borrowing costs roughly $3.7 million a year at rates near 5.4%, versus about $2.6 to $3.0 million of preferred distributions that were never in operating cash flow. We therefore anchor on roughly $12.5 million a year, in line with the 2021 to 2025 median of about $12.1 million, and divide by the 43.8 million shares and units now outstanding (share count is lower than the 51 million average used for 2025 because of $37.8 million of buybacks in 2025 and $63.7 million of dividends). That gives about $0.28 per share. Growth reconciliation. Owner earnings per share rose about 49% in 2025 (from $0.22 to $0.32), helped by lower interest and fewer shares. We assume no growth in year 1 of the base case, below that trailing rate, because the farms sold in late 2025 and higher interest on the new borrowing will hold results back in 2026. Base case, about $4.60 per share. Owner earnings stay at about $0.28 per share and continue indefinitely. Land does not wear out, the tenant bears the operating costs, and the company's ownership of farms has produced rent every year in the record we have. We credit no growth: the company's own rent increases at the 2023 renewal cycle show that rents can rise, but we cannot tie a specific rate to leases in hand, and 2025 results were driven by sales rather than rent growth. We also give no value to expected land appreciation or to acquisitions the company has not yet made. Bear case, about $3.10 per share. Owner earnings fall to about $0.19 per share and stay there. Named pressures: $67.1 million of MetLife debt at 5.55% is up for refinancing in March 2026 and another $67.8 million of debt resets rates before maturity; total debt was $161.6 million at year-end and rose by about $76 million in early 2026; farm improvements returned to the 2023 level of about $5.8 million a year; and 2025 already carried a $17.8 million write-down of properties and $1.9 million of credit-loss charges, with the loan book at $84.8 million. Bull case, about $6.40 per share. The company's 2025 earnings level carries through to the smaller share base (about $0.34 per share) and rents rise about 2% a year for ten years, as they did on the 2023 renewal cycle, then hold flat. What could make this wrong. If farmland sells above the values implied here, as the company itself notes, the sale price (and the special dividend of $0.20 per share paid after year-end 2025 'related to asset appreciation') would add value that this earnings-based approach does not count. Conversely, more asset sales without matching debt reduction would shrink earnings faster than our anchor assumes. We could not determine from the filing how much of 2025 rent came from the properties sold in the second half of the year, so the run-rate adjustment above is an estimate.