Analyst Steve Manaker at Oppenheimer has launched coverage of newly public Community Healthcare Trust with an 'outperform' rating and a price target of $21. A key in his analysis is the type of properties CEO Tim Wallace and his team are targeting: "The key for us is not just management's ability to underwrite the real estate but also the importance of a tenant's place in the local healthcare ecosystem." Community Healthcare Trust (Ticker: CHCT) is changing hands this morning at about $19.10.
Manaker's colleague Mohan Naidu has begun covering shares of population health management company Healthways (Ticker: HWAY) with a neutral rating. Among his concerns are how the exit of former CEO Ben Leedle might hurt contract renewals and the long-term impact of health insurance exchanges on Healthways' work with large employers.
Mizuho analysts have hiked their rating on shares of Healthcare Realty Trust to 'buy' from 'neutral' and lifted their price target to $28 from $26. The upgrade is due in part to their optimism about REITs in general but they also note that Nashville-based Healthcare Realty (Ticker: HR) is a better value after its 11 percent year-to-date drop and that its "more granular" approach to business will serve it well going forward.
Healthcare Realty Trust executives have hired JPMorgan Securities, Barclays Capital and Jefferies to run an offering of 10-year unsecured notes. The Nashville-based company isn't yet specifying a dollar figure but in an SEC filing says it will be less than $334 million, the amount it expects to pay to redeem $300 million worth of 6.5 percent notes that will mature in 2017.
"The redemption of all of the outstanding senior notes due 2017 will require funds in excess of the expected proceeds of this offering and the Company anticipates funding the additional amounts needed from borrowings on its unsecured credit facility and proceeds from the sale of real estate assets through the year," the filing says.
Shares of Healthcare Realty (Ticker: HR) opened Wednesday trading at $26.76 and are down slightly so far this year.
Analysts at Fitch Ratings have lifted their ratings on the debt of Healthcare Realty Trust to BBB from BBB-. The move, they say, reflects the real estate investment trust's shrinking leverage — total debt relative to recurring operating EBITDA has come down to 6.5x from 8.8x at the end of 2010 — and the steady growth of its cash flows.
Similarly, HR has retained 83% of its expiring tenants on average versus 67% for suburban office REITs and with significantly less variation (77% - 89% vs. 51% - 82%) over this same time period. While the magnitude of HR's outperformance has decreased as suburban office fundamentals improve, the low absolute (and relative) volatility is a key rating driver.
KeyBanc analyst Karin Ford has lowered her rating on shares of Healthcare Realty Trust to 'hold' from 'buy,' saying the real estate investment trust's 2015 growth prospects don't look too appetizing and that its 2014 rise of almost 30 percent (Ticker: HR) puts its near fair value. Ford is the second analyst this month to cool the jets on Nashville-based Healthcare Realty: Last week, Brian Hoffman at Avondale Partners said he doesn't see much dividend growth from the company in the coming year.
The directors of Healthcare Realty Trust last week voted to declassify the real estate investment trust's board structure, which now divides the nine-member body into groups of three. If shareholders approve next spring — and there's little reason to believe they won't — all directors will stand for a one-year term from then on.
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