Evercore ISI raises Ventas stock rating to Outperform due to its appealing valuation, according to Investing.com.

Evercore ISI raises Ventas stock rating to Outperform due to its appealing valuation, according to Investing.com.

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Monday, Sales Inc. . (NYSE:), a real estate investment trust specializing in healthcare properties, received an upgrade to its stock rating from Evercore ISI. The company changed its stance from “In Line” to “Outperform” and set a new price target of $50.00 for the company’s shares.

The upgrade comes after a period of underperformance relative to the broader real estate investment trust (REIT) index and the healthcare sector. Over the past twelve months, Ventas posted a negative total return of 5%, lagging these benchmarks by approximately 1,200 basis points.

Despite this, the analyst highlighted that the company’s valuation has become attractive, trading almost two standard deviations below its three-year average price compared to the next twelve months’ adjusted funds from operations multiple. (P/NTM) (AFFO).

This drop in valuation is not indicative of fundamental issues within Ventas, as the company has maintained strong credit ratings of BBB+/Baa1 and recently issued C$650 million of 5.1% senior notes. , maturing in 2029. The successful private placement highlights the high quality of Ventas’ Canadian senior housing assets and the strength of its balance sheet.

The analyst further noted that Ventas’ business model is strong, citing a cyclical recovery in the company’s senior housing operating portfolio (SHOP), which is supported by peer data and forecasts. public companies and third-party databases in the senior housing market. The company’s ambulatory medicine (OM), research and innovation (R&I), and triple net portfolios were also highlighted as stable elements that contribute to Ventas’ growth.

The analyst’s projections for Ventas’ AFFO align with consensus and are primarily based on expected operational gains within the SHOP segment. This optimistic outlook for the company’s core business, combined with the stability of its other businesses, led to the positive reassessment of Ventas stock by Evercore ISI.

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