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Investing.com - Mizuho has raised its price target on Omega Healthcare Investors (NYSE:OHI) to $40.00 from $37.00 while maintaining a Neutral rating on the stock. The REIT, which currently trades near its 52-week high of $44.41 and offers a 6.26% dividend yield, has maintained dividend payments for 23 consecutive years according to InvestingPro data.
The firm noted that skilled nursing facilities (SNFs) have significant positive news already reflected in their valuations, with the sub-group outperforming the RMZ index by an average of 13 percentage points year-to-date.
Mizuho highlighted that OHI has outperformed Sabra Health Care REIT (SBRA) by 14 percentage points in the current quarter, with both companies trading at 13-14x AFFO multiples, which is 2-3x above their historical averages.
The elevated valuation compared to historical levels is the primary reason Mizuho maintains its Neutral stance on Omega Healthcare Investors.
The firm expressed a preference for senior housing REITs within the healthcare sector, specifically naming Welltower (WELL) as its top pick and Ventas (VTR) with an Outperform rating.
In other recent news, Omega Healthcare Investors reported strong financial results for the second quarter of 2025. The company’s earnings per share (EPS) were $0.46, surpassing the forecast of $0.44. Revenue also exceeded expectations, reaching $283 million compared to the anticipated $240.6 million. Additionally, Omega Healthcare’s core funds from operations (FFO) were reported at $0.77 per share, beating both Citizens’ estimate of $0.74 and the consensus estimate of $0.75. This outperformance was largely attributed to "other investment income."
In a strategic move, Omega Healthcare has made an investment in MedaSync, a company specializing in AI-powered reimbursement optimization software for skilled nursing facilities. This investment is intended to accelerate the adoption of MedaSync’s technology in the skilled nursing sector, with MedaSync reporting a more than 100% year-over-year increase in customer acquisition. Meanwhile, Citizens analyst Aaron Hecht reiterated a Market Perform rating on Omega Healthcare stock following these developments.
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