Analyst Juan C. Sanabria of BMO Capital maintained a Hold rating on Healthcare Realty Trust (HR – Research Report), retaining the price target of $19.00.
Juan C. Sanabria has given his Hold rating due to a combination of factors surrounding Healthcare Realty Trust’s current strategic position and leadership changes. The appointment of Pete Scott as the new CEO is seen as a positive development, given his strong background and potential to enhance the company’s leadership team. However, despite the positive leadership change, there are expectations of a potential dividend cut, which could be around 20%, to align with a more sustainable payout ratio.
The company is currently trading at a discount to its net asset value, yet mergers and acquisitions seem unlikely at this point. The anticipated dividend adjustment is part of a broader strategy to maximize retained earnings, reduce leverage, and support growth in leasing and capital expenditures. While Scott’s experience is a strong fit for the company, his lack of prior CEO experience and the need for further management changes contribute to the Hold rating, as these factors introduce a level of uncertainty regarding the company’s future performance.
In another report released on April 2, J.P. Morgan also maintained a Hold rating on the stock with a $18.00 price target.