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On Tuesday, JMP Securities analyst Aaron Hecht increased the price target for American Healthcare REIT , Inc (NYSE:AHR) to $35 from the previous target of $30, while maintaining a Market Perform rating on the stock. The company, currently valued at $4.85 billion, has seen its stock surge by 133% over the past year, according to InvestingPro data. The adjustment follows the company’s fourth-quarter financial results for the year 2024, which showed a Core Funds From Operations (FFO) of $0.40 per share, aligning with the general market consensus but falling slightly short of JMP’s estimate of $0.43 per share.
The shortfall in Core FFO was attributed mainly to asset dispositions and At-The-Market (ATM) activity. Despite this, American Healthcare REIT’s integrated senior health campuses (ISHC) and senior housing operating property (SHOP) segments experienced remarkable growth, with year-over-year increases of 28% and 66.6%, respectively. This growth contributed to the company’s overall revenue increase of 11.11% in the last twelve months. InvestingPro analysis reveals several additional growth indicators and financial metrics that subscribers can access through detailed Pro Research Reports.
Hecht also noted the company’s initial guidance for the fiscal year 2025, which sets Core FFO expectations between $1.56 and $1.60 and anticipates same-store Net Operating Income (NOI) growth in the range of 7.0% to 10.0%. The analyst highlighted American Healthcare REIT’s strategic financial maneuvers, including the issuance of accretive equity to reduce debt and the sale of non-core assets. These actions have halved the company’s leverage within a single year, paving a clearer path for both internal and external earnings growth.
The analyst expressed a positive outlook on the company’s future performance, citing its exposure to senior housing RIDEA assets. According to Hecht, these assets possess some of the most robust fundamentals in the real estate sector, positioning American Healthcare REIT to potentially outperform in the coming years. The company maintains a healthy liquidity position with a current ratio of 1.15, and InvestingPro rates its overall financial health as GOOD with a score of 2.97. However, based on InvestingPro’s Fair Value analysis, the stock appears to be trading above its intrinsic value at current levels.
In other recent news, American Healthcare REIT announced its fourth-quarter 2024 earnings, reporting a net loss per share of $0.21 and revenue totaling $542.74 million. Despite these results, the company highlighted strong operational performance, particularly in its Trilogy and SHOP segments, with a significant improvement in its net debt to adjusted EBITDA ratio from 8.5x to 4.3x. The company plans to invest $140 million in new development projects in 2025, focusing on expanding its senior housing operations. Looking ahead, American Healthcare REIT projects Normalized Funds from Operation (NFFO) per share between $1.56 and $1.60 for 2025, with anticipated same-store NOI growth of 7-10%. Analyst commentary from the earnings call noted that the company is well-positioned for future growth, supported by favorable demographic trends in the senior housing market. Despite the challenges posed by potential regulatory changes in Medicaid policies and rising construction costs, the company remains optimistic about its strategic focus and long-term prospects.
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