Purpose This study examines the valuation of European-listed real estate companies by assessing the value relevance of accounting-based performance metrics – earnings per share (EPS), return on equity (ROE) and dividend per share (DPS) – as complementary or alternative indicators to the traditionally dominant net asset value (NAV). Design/methodology/approach Using a panel dataset of 102 firms from 2005 to 2024, the study applies three regression models – share price, price change and share return – alongside a difference-in-differences (DiD) approach to capture structural shifts during the 2008–09 financial crisis and the 2021–23 COVID-19 and interest rate hike period. Findings The findings reveal that EPS and DPS are the most consistent and significant predictors of share prices, with DPS showing the highest explanatory power, particularly during the COVID-19 and interest rate hike period. ROE is the strongest predictor of share returns, especially in times of economic stress. Sectoral effects are generally weak, indicating that firm-level financial performance outweighs industry classification in explaining market valuation. Research limitations/implications The study is subject to potential biases in sample selection such as firm size, geographic and market classification, language. The sample is representative of large, liquid and internationally oriented firms, the findings may not generalize to smaller, less liquid or emerging market companies. Practical implications For analysts, integrating accounting metrics alongside NAV enhances valuation accuracy and comparability. For generalist investors, understanding which factors consistently influence prices can inform long-term valuation models, portfolio construction and risk assessment. For practitioners, it provides a robust, multi-metric valuation framework that enhances decision-making by integrating familiar financial indicators with traditional asset-based measure. Originality/value The DiD framework is employed to capture how investor responds to financial metrics shift across crisis and COVID-19 and interest rate hike periods (2008–2009 and 2021–2023). Use of three regression models – share price, share price change and share return – isolates the explanatory power of each financial metric under varying market conditions. Sector-level analysis offers insights into performance heterogeneity. For academic research, it fills a gap in European real estate literature by empirically testing the relevance of accounting metrics in stock valuation, an area previously dominated by NAV-based approaches.
Qiulin Ke (Fri,) studied this question.