Cautious Outlook for LTC Properties Amid Liquidity Pressures and Uncertain Rental Income

BMO Capital analyst Juan C. Sanabria maintained a Sell rating on LTC Properties (LTC – Research Report) today and set a price target of $39.00.

Juan C. Sanabria has given his Sell rating due to a combination of factors impacting LTC Properties. Despite a positive first-quarter performance, with adjusted funds available for distribution (FAD) and funds from operations (FFO) slightly exceeding expectations, concerns remain. The company’s conversion of senior housing assets to a SHOP model, while yielding a promising 8.3%, raises questions about potential deferred capital expenditures.
Furthermore, although LTC’s acquisition pipeline has expanded significantly, liquidity pressures persist, and there is uncertainty surrounding the financial health of Genesis, which constitutes a notable portion of LTC’s rental income. These underlying issues, despite the optimistic guidance for 2025, contribute to a cautious outlook, prompting the Sell recommendation.