Omega Healthcare stock price target held at $41 by RBC Capital

Investing.com - RBC Capital has reiterated its Sector Perform rating and $41.00 price target on Omega Healthcare Investors (NYSE:OHI), currently trading at $40.08, following a non-deal roadshow with the company’s management. According to InvestingPro data, the company maintains a robust 6.69% dividend yield and has sustained dividend payments for 23 consecutive years.

The healthcare real estate investment trust is implementing a "new more creative investment strategy" with a focus on strengthening its existing portfolio, according to RBC Capital’s research note.

RBC Capital expressed optimism about this strategic shift, suggesting it could potentially drive annual adjusted funds from operations (AFFO) growth of 4-6% in the future.

Despite the positive long-term outlook, the research firm noted that ramping up investments in new segments might take time, particularly when considering the net impact after planned asset sales.

The firm maintained its neutral stance on the stock as reflected in the unchanged Sector Perform rating and $41.00 price target for Omega Healthcare Investors.

In other recent news, Omega Healthcare Investors announced the redemption of its $600 million senior notes due in 2026, depositing $607.88 million with the trustee for the redemption price, which included the principal and accrued interest. The company also closed a new $2.3 billion senior unsecured credit facility, replacing its previous $1.45 billion revolving credit facility. This new package comprises a $2.0 billion revolving credit facility and a $300 million delayed draw term loan facility, along with amendments to reduce interest rate margins on an existing $428.5 million term loan.

Cantor Fitzgerald initiated coverage on Omega Healthcare Investors with an Overweight rating and a price target of $50.00, highlighting the company’s capital allocation skills. Additionally, Mizuho raised its price target on Omega Healthcare Investors to $40.00, maintaining a Neutral rating, citing that positive news is already reflected in the valuations of skilled nursing facilities. Omega Healthcare Investors also made a strategic investment in MedaSync, aiming to boost the growth of AI-powered reimbursement software in the skilled nursing sector. The investment is expected to accelerate the technology’s adoption, with MedaSync reporting significant growth in customer acquisition.

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