Street Calls of the Week
Investing.com - Cantor Fitzgerald initiated coverage on Omega Healthcare Investors (NYSE:OHI) with an Overweight rating and a $50.00 price target, representing a potential 19.5% upside from current levels. The healthcare REIT, currently trading near its 52-week high of $44.41, has demonstrated strong momentum with a 17.62% year-to-date return, according to InvestingPro data.
The investment firm’s price target assumes a 2026 estimated AFFO multiple of 16.8x, which compares to a 19.0x average for the REIT industry. Cantor Fitzgerald cited OHI’s capital allocation skills as a key factor in selecting it as their preferred investment in the Skilled Nursing category. InvestingPro analysis reveals the company has maintained dividend payments for 23 consecutive years, currently offering an attractive 6.35% yield.
The firm highlighted OHI’s growing exposure to senior housing as a potential catalyst, particularly through Maplewood, which represents 6.4% of OHI’s portfolio as its third-largest operator. Maplewood is steadily increasing its rent payments to Omega Healthcare .
Cantor Fitzgerald noted that if Maplewood’s high-end Inspir facility in Manhattan continues its gradual improvement, it could generate an additional $15-$20 million in annualized NOI for Omega Healthcare.
The firm also pointed to positive developments with two of OHI’s operators: LaVie, which has emerged from bankruptcy, and Genesis, which is currently in bankruptcy proceedings, describing both situations as potentially beneficial for Omega Healthcare. With a market capitalization of $12.92 billion and strong revenue growth of 14.04% over the last twelve months, InvestingPro rates the company’s overall financial health as GREAT, suggesting solid fundamentals supporting its growth trajectory.
In other recent news, Omega Healthcare Investors reported strong financial results for the second quarter of 2025. The company posted earnings per share of $0.46, surpassing the forecast of $0.44, and revenue reached $283 million, exceeding the expected $240.6 million. Additionally, Omega Healthcare’s core funds from operations were $0.77 per share, beating both Citizens’ estimate of $0.74 and the consensus estimate of $0.75, largely due to other investment income. The company also closed a new $2.3 billion senior unsecured credit facility, replacing a previous $1.45 billion facility. This new credit package includes a four-year $2.0 billion revolving credit facility and a three-year $300 million delayed draw term loan facility. In a strategic move to enhance its portfolio, Omega Healthcare made an investment in MedaSync, aiming to accelerate the adoption of AI-powered reimbursement optimization software in skilled nursing facilities. Analyst activity included Mizuho raising its price target for Omega Healthcare to $40 while maintaining a Neutral rating, and Citizens reiterating a Market Perform rating following the company’s earnings report.
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