Cautious Hold Rating for CareTrust REIT Amid Mixed Financial Signals and Uncertain Growth Trajectory

BMO Capital analyst Juan C. Sanabria maintained a Hold rating on CareTrust REIT (CTRE – Research Report) today and set a price target of $32.00.

Juan C. Sanabria has given his Hold rating due to a combination of factors related to CareTrust REIT’s recent financial performance and future guidance. The company’s fourth quarter earnings and acquisitions were in line with expectations, but the guidance for 2025 was set below what analysts had anticipated. This guidance does not take into account any future acquisitions, which could impact the overall financial outlook.
Additionally, CareTrust REIT’s year-to-date investments have slightly moderated, and there is an expectation for more balanced funding between debt and equity in 2025 due to a higher weighted average cost of capital. While the potential for investment upside exists, particularly with anticipated acquisitions, current financial metrics such as normalized funds from operations (FFO) and funds available for distribution (FAD) are in line with the Street but slightly below BMO’s estimates. These mixed signals contribute to the Hold rating, reflecting a cautious stance amid uncertainties in the company’s growth trajectory.