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On Monday, Jefferies initiated coverage on American Healthcare REIT , Inc. (NYSE:AHR), giving the stock a Buy rating and setting a price target of $37.00. The firm’s analysis highlighted the company’s strategic focus on high acuity senior housing, which accounts for approximately 71% of its net operating income (NOI). According to InvestingPro data, AHR has a market capitalization of $5 billion and currently trades near its 52-week high of $31.61, reflecting strong market confidence in its business model.
American Healthcare REIT’s emphasis on the Integrated Senior Healthcare Communities (ISHC) segment, which includes skilled nursing and assisted living facilities, was noted as a distinctive feature compared to other Real Estate Investment Trusts (REITs). This specialization was seen as well-aligned with the growing senior population’s needs.
Jefferies projects a 12.7% compound annual growth rate (CAGR) in earnings for American Healthcare REIT over the next three years, which is notably higher than the median of 3.2% for its peer group. The company’s current next twelve months (NTM) earnings multiple stands at 19.7 times, which Jefferies anticipates could increase further.
The analyst’s statement emphasized the REIT’s strong position in the market, stating, "AHR’s focus on high acuity senior housing (~71% of NOI) positions it as one of the cleanest ways to invest in the aging demographics theme. AHR’s ISHC segment (skilled nursing + assisted living) is unique to other REITs and has good market fit with seniors."
The positive outlook for American Healthcare REIT is based on the company’s market fit and the potential for earnings growth, with the expectation that its premium multiple will continue to expand. Jefferies’ coverage initiation and bullish price target reflect confidence in the company’s future performance.
In other recent news, American Healthcare REIT, Inc. reported its fourth-quarter 2024 earnings, revealing a net loss per share of $0.21 and revenue of $542.74 million. The company emphasized its strategic focus on expanding senior housing operations and improving financial metrics. KeyBanc Capital Markets adjusted its price target for American Healthcare REIT to $34, maintaining an Overweight rating, following a thorough evaluation of the company’s operations and potential growth opportunities. Truist Securities raised its price target to $32 from $30, keeping a Buy rating, citing the positive impact of recent property sales and equity offerings that reduced the company’s net debt-to-EBITDA ratio. JMP Securities increased its price target to $35, noting the company’s strong growth in its integrated senior health campuses and senior housing operating property segments. The firm highlighted American Healthcare REIT’s strategic financial maneuvers, including equity issuance and asset sales, which have significantly reduced leverage. These developments reflect a positive outlook for the company’s future performance, supported by favorable demographic trends in the senior housing market.
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