Global Medical REIT stock rating upgraded by Citizens on transformation

Investing.com - Citizens has upgraded Global Medical REIT (NYSE:GMRE) from Market Perform to Market Outperform and set a price target of $40.00. The stock, currently trading at $30.80, is near its 52-week low of $30.09, with InvestingPro data showing technically oversold conditions.

The upgrade comes as Citizens believes the healthcare real estate investment trust is "in the early stages of a positive transformation" following several significant changes to its leadership and capital structure over the past six months. The company maintains a substantial 9.74% dividend yield and has demonstrated steady revenue growth of 2.95% over the last twelve months.

Key developments cited by Citizens include a dividend restructuring, CEO change, share repurchase authorization, reverse stock split, enhanced supplemental disclosures, and improvements to the company’s debt maturity profile.

Citizens expects GMRE’s next initiatives to focus on improving messaging consistency while potentially exploring new investment property types, suggesting the company needs to become more efficient through either G&A cuts or transformational growth that might require mergers and acquisitions.

The research firm believes shareholders should benefit under either scenario through higher earnings or "a superior multiple through scale" as the company continues its organizational shift to "functionally rebrand" and enhance its institutional investment profile.

In other recent news, Global Medical REIT reported its second-quarter 2025 earnings, revealing a mixed financial performance. The company posted revenue of $37.9 million, exceeding forecasts of $35.39 million, a positive surprise of 7.09%. However, its earnings per share (EPS) came in at -$0.01, missing the expected $0.01. Additionally, Global Medical REIT announced a $50 million stock repurchase program and a one-for-five reverse stock split approved by its Board of Directors. The stock buyback will allow the company to purchase shares through various methods, but the timing and amount will depend on market conditions. The company also restructured its debt through an amended credit facility, extending the maturity of its $400 million revolver component to October 2029, with options to extend further. Analyst Aaron Hecht from Citizens JMP reiterated a Market Perform rating on the stock, noting that the company’s core FFO of $0.20 per share aligned with expectations. Despite beating net operating income expectations, higher general and administrative costs affected funds from operations and distribution. These developments reflect the company’s ongoing efforts to manage its financial strategies.

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