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Healthcare Realty Trust (HR)
NYSE:HR
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Healthcare Realty Trust
(NYSE:HR)
53Neutral
Positive Factors
Earnings Performance
Normalized FFO per share beat the Street expectations, showing stronger performance in earnings.
Leasing Performance
Leasing momentum continued with a record 686K SF of new leases signed with solid 81.6% retention.
Negative Factors
Executive Departure
The departure of two senior executives in short order leaves uncertainty and raises questions.
Financial Strain
The dividend payout ratio remains high at 111%, indicating financial strain.
Leadership Uncertainty
There is no update on the CEO search process, creating uncertainty in leadership.
Healthcare Realty Trust (HR) vs. S&P 500 (SPY)
Market Cap
$5.65B
Dividend Yield7.7%
Average Volume (3M)2.59M
Price to Earnings (P/E)―
Beta (1Y)0.71
Revenue Growth-5.62%
EPS Growth-140.10%
CountryUS
Employees550
SectorReal Estate
Sector Strength79
IndustryREIT - Healthcare Facilities
Share Statistics
EPS (TTM)-1.78
Shares Outstanding350,820,400
10 Day Avg. Volume2,432,007
30 Day Avg. Volume2,593,215
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)4.59
Price to Cash Flow (P/CF)10.60
P/FCF Ratio202.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$18.00Price Target Upside11.73% Upside
Rating ConsensusHold
Number of Analyst Covering6
Healthcare Realty Trust Business Overview & Revenue Model
Company DescriptionHealthcare Realty Trust is a real estate investment trust that integrates owning, managing, financing and developing income-producing real estate properties associated primarily with the delivery of outpatient healthcare services throughout the United States. As of September 30, 2020, the Company owned 211 real estate properties in 24 states totaling 15.5 million square feet and was valued at approximately $5.5 billion. The Company provided leasing and property management services to 11.9 million square feet nationwide.
How the Company Makes MoneyHealthcare Realty Trust makes money primarily through leasing its properties to healthcare providers, including hospitals, physician groups, and other medical service entities. The company's revenue model is centered around collecting rental income from these long-term lease agreements, which often include annual rent escalations. Additionally, HR may earn revenue through property management fees for services provided to tenants. Strategic partnerships and acquisitions of properties in high-demand markets also contribute to the company's earnings, allowing it to expand its portfolio and increase rental income potential. The trust's focus on outpatient facilities aligns with trends towards outpatient care, ensuring steady demand for its properties.
Healthcare Realty Trust Financial Statement Overview
Summary
Healthcare Realty Trust exhibits a mixed financial profile. The income statement performance is weak due to declining revenue and persistent net losses. However, the balance sheet remains stable with manageable leverage, and cash flow is a bright spot, with improvements in free cash flow indicating enhanced cash generation capabilities. The company must address profitability issues to strengthen its overall financial health.Income Statement
Healthcare Realty Trust has shown declining revenue over the past year, with a significant drop from $1.34 billion in 2023 to $1.23 billion in 2024. The net income has been negative for several years, indicating ongoing profitability challenges. Gross profit margin is relatively strong at approximately 61.3% in 2024, but the negative net profit margin of -53.1% reveals significant net losses. EBIT and EBITDA margins have shown some strength, with EBITDA margin at approximately 109.3% in 2024, but overall income performance is weak due to persistent net losses.40
Negative
Balance Sheet
The balance sheet reflects a modest debt-to-equity ratio of 0.57, indicating a manageable level of leverage. However, the equity ratio has decreased from 54% in 2023 to 49.2% in 2024, suggesting reduced equity relative to total assets. Despite this, the company maintains a stable stockholders' equity base. The return on equity is negative due to the net losses, highlighting inefficiencies in utilizing equity to generate profits. Overall, the balance sheet is stable but shows potential risk from declining equity ratios.65
Positive
Cash Flow
On the cash flow front, operating cash flow has remained positive and stable, demonstrating the company’s ability to generate cash from operations even in the face of net losses. Free cash flow has grown significantly, from $268.8 million in 2023 to $501.6 million in 2024, indicating improved cash generation efficiency. The operating cash flow to net income ratio is not favorable due to negative net income, but the increase in free cash flow is a positive sign for liquidity.70
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 1.23B | 1.34B | 932.64M | 534.82M | 499.63M | Gross Profit |
| 756.21M | 112.62M | 588.60M | 322.54M | 303.12M | EBIT |
| 673.09M | 54.22M | 77.84M | 84.88M | 79.37M | EBITDA |
| 295.55M | 780.51M | 555.62M | 287.60M | 274.18M | Net Income Common Stockholders |
| -654.49M | -278.26M | -106.00M | 14.32M | 19.19M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 68.92M | 25.70M | 60.96M | 13.18M | 15.30M | Total Assets |
| 10.65B | 12.64B | 13.85B | 4.26B | 3.81B | Total Debt |
| 296.85M | 5.30B | 5.70B | 1.92B | 1.71B | Net Debt |
| 227.93M | 5.27B | 5.64B | 1.91B | 1.70B | Total Liabilities |
| 5.35B | 5.71B | 6.17B | 2.07B | 1.86B | Stockholders Equity |
| 5.23B | 6.82B | 7.57B | 2.19B | 1.95B |
| Cash Flow | Free Cash Flow | |||
| 501.62M | 268.79M | 109.20M | 131.94M | 376.13M | Operating Cash Flow |
| 501.62M | 499.82M | 272.75M | 232.63M | 470.09M | Investing Cash Flow |
| 900.92M | 349.14M | 1.63B | -562.47M | -555.17M | Financing Cash Flow |
| -1.36B | -884.22M | -1.86B | 327.72M | 99.72M |
Healthcare Realty Trust Technical Analysis
Negative
16.11
Price Trends
16.52
Negative
16.72
Negative
16.79
Negative
Market Momentum
0.09
Negative
57.89
Neutral
75.03
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HR, the sentiment is Negative. The current price of 16.11 is below the 20-day moving average (MA) of 16.66, below the 50-day MA of 16.52, and below the 200-day MA of 16.79, indicating a bearish trend. The MACD of 0.09 indicates Negative momentum. The RSI at 57.89 is Neutral, neither overbought nor oversold. The STOCH value of 75.03 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for HR.
Healthcare Realty Trust Risk Analysis
Healthcare Realty Trust disclosed 42 risk factors in its most recent earnings report. Healthcare Realty Trust reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Healthcare Realty Trust Peers Comparison
Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $92.91B | 173.83 | 3.32% | 1.83% | 20.40% | 57.80% | |
72 Outperform | $1.58B | 16.98 | 9.81% | 6.57% | 6.54% | -4.13% | |
68 Neutral | $13.13B | 51.39 | 3.29% | 6.54% | 23.82% | -37.59% | |
63 Neutral | $29.43B | 336.12 | 0.80% | 2.79% | 9.48% | ― | |
61 Neutral | $4.43B | 16.13 | -3.23% | 11.37% | 6.25% | -21.19% | |
56 Neutral | $3.15B | ― | -38.69% | 7.44% | 14.19% | -331.18% | |
53 Neutral | $5.65B | ― | -10.95% | 7.70% | -5.62% | -140.10% |
* Real Estate Sector Average
Performance Comparison
HR
Healthcare Realty Trust
16.11
2.98
22.70%
DOC
Healthpeak Properties
18.43
0.54
3.02%
WELL
Welltower
143.29
53.43
59.46%
LTC
LTC Properties
34.69
4.59
15.25%
VTR
Ventas
65.51
23.33
55.31%
MPW
Medical Properties
5.24
1.57
42.78%
Healthcare Realty Trust Earnings Call Summary
Earnings Call Date: Feb 19, 2025 | % Change Since: -3.42% | Next Earnings Date: May 13, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted strong leasing performance, occupancy gains, and debt reduction efforts, indicating a focus on long-term growth. However, challenges related to bankruptcies and the need for deleveraging were notable concerns. The overall sentiment is cautiously optimistic with a focus on strategic improvement.Highlights
Record New Lease Commitments
Healthcare Realty Trust Incorporated achieved new lease commitments of nearly 600,000 square feet in the fourth quarter and 2 million square feet for the year, both all-time records.
Occupancy and Operational Efficiency Improvements
The company delivered 149 basis points of occupancy absorption, exceeding their projection of 100 points. They also reduced controllable operating expenses by 100 basis points.
Debt Reduction and Share Repurchase
Healthcare Realty Trust Incorporated repurchased 31 million shares and repaid $350 million of debt, ending the year with a leverage of 6.4 times, below the forecasted 6.5 times.
Strong Same-Store Cash NOI Growth
Same-store cash NOI growth was 3.1% for the fourth quarter and 2.9% for the year, with expectations for continued growth in 2025.
Lowlights
Bankruptcy Challenges
The company faced bankruptcies with Stewart Health and Prospect Medical, with significant efforts needed to address and secure leases for the affected spaces.
Near-Term Earnings Headwind from Deleveraging
The company's strategy to focus on debt reduction is expected to create a modest near-term earnings headwind.
Dependency on Operational Growth for Dividend Coverage
The company aims for full dividend coverage by the end of 2025 or early 2026, with dependency on leasing activity and operational efficiency.
Company Guidance
During the Healthcare Realty Trust Incorporated fourth quarter 2024 earnings call, the company provided detailed guidance for 2025. The strategic priorities include operational growth, refining the portfolio, and significant debt reduction. Key metrics for 2024 included a normalized FFO per share of $0.40 for the fourth quarter and $1.56 for the year, both at the high end of expectations. The company achieved new lease commitments of 2 million square feet for the year, with a record 690,000 square feet in the fourth quarter. They also improved multi-tenant occupancy by 149 basis points and reduced controllable operating expenses by 100 basis points. Capital allocation included $1.3 billion in proceeds, $510 million for share repurchases, and $350 million for debt repayment, ending the year with a leverage ratio of 6.4 times. For 2025, Healthcare Realty Trust aims for same-store NOI growth between 3% and 3.75%, with $400 to $500 million in non-core asset sales, focusing on debt repayment to reduce leverage to 6 to 6.25 times. The company is optimistic about achieving full dividend coverage by late 2025 or early 2026.Healthcare Realty Trust Corporate Events
Executive/Board ChangesBusiness Operations and Strategy
Healthcare Realty Trust Appoints New CEO Peter A. Scott
Positive
Apr 7, 2025
Healthcare Realty Trust has appointed Peter A. Scott as its new President and CEO, effective April 15, 2025, following a rigorous search process. Scott, who previously served as CFO of Healthpeak Properties, brings extensive experience in healthcare real estate and investment banking. His appointment is expected to bolster the company’s growth and operational strategies, leveraging his expertise in strategic mergers and financial restructuring. Concurrently, Constance B. Moore will step down as Interim President and CEO but will remain on the Board, ensuring a smooth transition.
Spark’s Take on HR Stock
According to Spark, TipRanks’ AI Analyst, (HR) is a Neutral.
Healthcare Realty Trust’s overall stock score reflects a mix of strengths and challenges. The company shows strong cash flow generation and technical momentum, but faces significant profitability issues and valuation challenges. Positive leasing performance and strategic improvements are encouraging, yet bankruptcy-related rent collection issues and the need for deleveraging present risks. The high dividend yield is attractive but may be unsustainable without profitability improvement.
To see Spark’s full report on (HR) stock, click here.
Legal ProceedingsBusiness Operations and StrategyFinancial Disclosures
Healthcare Realty Trust Updates on Rent Collection Challenges
Negative
Feb 28, 2025
On February 28, 2025, Healthcare Realty Trust announced its participation in Citi’s 2025 Global Property CEO Conference scheduled for March 3-4, 2025, and released an updated investor presentation. Additionally, the company reported partial rent collection from Prospect Medical, which filed for Chapter 11 bankruptcy in January 2025. Healthcare Realty collected $0.4 million in rent for January and February 2025, but there is uncertainty regarding the recovery of additional unpaid rent or the ability to relet the space.
Executive/Board ChangesDividendsBusiness Operations and StrategyFinancial Disclosures
Healthcare Realty Trust Reports Q4 Loss, Leadership Change
Neutral
Feb 19, 2025
Healthcare Realty Trust reported a net loss of $106.8 million for the fourth quarter ending December 31, 2024, and declared a quarterly dividend of $0.31 per share. Despite the loss, the company achieved a normalized FFO per share of $0.40, at the high end of its guidance range, and experienced growth in leasing activities with a record 686,000 square feet of new leases. Furthermore, the company undertook significant capital allocation efforts, closing $522 million in joint ventures and asset sales, and reducing its leverage by repaying a $350 million term loan. Leadership changes were also announced, with Connie Moore appointed as Interim President & CEO, and a search is underway for a permanent leader.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.