Hold Rating Maintained for Healthcare Realty Trust Amid Dividend Sustainability Concerns and Mixed Financial Signals

Juan C. Sanabria, an analyst from BMO Capital, maintained the Hold rating on Healthcare Realty Trust (HR – Research Report). The associated price target was lowered to $18.50.

Juan C. Sanabria has given his Hold rating due to a combination of factors impacting Healthcare Realty Trust’s financial performance. The company’s first-quarter earnings for 2025 met expectations, but the dividend payout remains under pressure, with a payout ratio of 107%. This high payout ratio raises concerns about the sustainability of the dividend, especially as the company transitions under new CEO Pete Scott.
Furthermore, while leasing activity was strong, same-store net operating income (SSNOI) growth and net absorption were softer than anticipated, which could affect future performance. The company’s guidance for normalized funds from operations (FFO) per share is slightly below the Street’s expectations but aligns with BMO’s projections. These mixed signals contribute to the decision to maintain a Hold rating, as the outlook remains uncertain with potential challenges in maintaining dividend levels.