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On Thursday, B.Riley analysts resumed coverage on shares of Global Medical REIT Inc . (NYSE:GMRE) with a Neutral rating and set a price target of $9.00. The analysts provided insights into the company’s position within the market, noting its current market capitalization of $574 million and focus on owning medical office buildings (MOBs) and a smaller number of inpatient rehab facilities (IRFs). According to InvestingPro data, the company has demonstrated strong performance with a 14.02% year-to-date return, while maintaining a healthy current ratio of 1.44.
The analysts recognized the real estate investment trust’s (REIT) strategy as fitting for the current economic climate due to the high percentage of net lease assets in its portfolio. They also pointed out the stock’s valuation, which currently stands at a discount compared to its peers, could be seen as attractive. InvestingPro analysis supports this view, indicating the stock is currently trading below its Fair Value, while offering a substantial dividend yield of 9.78% to shareholders. For deeper insights into GMRE’s valuation metrics and growth potential, investors can access the comprehensive Pro Research Report, available exclusively on InvestingPro.
However, the analysts advised caution for investors considering Global Medical (TASE:BLWV) REIT stock. They highlighted potential negative catalysts that could affect the company’s financial performance. One such concern is the $350 million term loan with an interest rate of 2.8%, which is due to mature in 2026. The possibility of refinancing this loan at market rates close to the date of the report could significantly impact the company’s funds from operations (FFO) and adjusted funds from operations (AFFO) per share.
The B.Riley team also pointed out that while the potential negative impact on earnings might already be reflected in the REIT’s current valuation, the additional pressure from refinancing could put the company’s relatively high dividend payout ratio at risk. This concern forms the basis for their recommendation for investors to remain on the sidelines for the time being.
In other recent news, Global Medical REIT Inc. reported a notable performance for the fourth quarter of 2024, surpassing earnings expectations. The company achieved an earnings per share (EPS) of $0.02, exceeding the forecast of $0.00, while revenue reached $35.16 million, surpassing the anticipated $34.59 million. This marks a 6.7% increase in total revenues year-over-year. Additionally, Global Medical REIT expanded its portfolio by acquiring a 15-property medical outpatient portfolio, further strengthening its market position. The company has projected its Adjusted Funds from Operations (AFFO) for 2025 to be between $0.89 and $0.93 per share. In terms of strategic growth, Global Medical REIT entered into a joint venture with Heitman, focusing on medical office properties. The venture, initially seeded with two properties, allows the company to capitalize on acquisition and asset management opportunities. Furthermore, the company announced a CEO succession plan, aiming to bring in leadership with expertise in capital markets and medical real estate.
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