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Healthcare Realty upgraded to Buy at BTIG on discount

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Healthcare Realty Trust (NYSE:HR) stock gained 2.1% in Tuesday morning trading after BTIG upgraded the the owner of medical office buildings to Buy from Neutral as shares trade at a discount to peers and the wider REIT sector.

Since agreeing to buy Healthcare Trust of America in early 2022, shares of Healthcare Realty (HR) have dropped 41.6%, outpacing the S&P 500 Health Care REITs Index Sub Industry’s (SP500-60101050) 21.2% slide. The merger closed on July 20, 2023.

In a note to clients, BTIG pointed out the stock is changing hands at 8.9 times its 2024 estimates, a 15% discount to the overall health care sector.

The firm expects HR’s same-store net operating income growth to be above-average next year, as “management has built a sizable leasing pipeline.”

“Moreover, as the Fed potentially nears the end of its rate raising cycle, the financing headwinds should ease,” the note said.

The Buy rating diverges from the SA Quant system rating of Hold and agrees with the average sell-side analyst rating of Buy.

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