In a report released today, Juan C. Sanabria from BMO Capital maintained a Hold rating on CareTrust REIT (CTRE – Research Report), with a price target of $31.00.
Juan C. Sanabria has given his Hold rating due to a combination of factors related to CareTrust REIT’s recent strategic moves. The company announced a significant acquisition of Care REIT in the U.K. for $817 million, marking its entry into the U.K. market and diversifying its portfolio. While this transaction is expected to be accretive to funds available for distribution per share by approximately 3%, there are concerns about potential U.S. Medicaid cuts, which could impact the company’s financial stability.
Additionally, the acquisition price was more aggressive compared to recent similar transactions, which could pose a risk. The deal is expected to increase leverage from 0.5x to 1.7x, which may affect the company’s balance sheet. Despite the positive aspects of the acquisition, such as the expected accretion to normalized funds from operations, the uncertainties surrounding financing and potential policy changes contribute to the Hold rating.
According to TipRanks, C. Sanabria is a 2-star analyst with an average return of 0.1% and a 46.12% success rate. C. Sanabria covers the Real Estate sector, focusing on stocks such as Healthpeak Properties, Welltower, and Tanger.
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