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Healthcare Realty Trust (HR)
NYSE:HR
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Healthcare Realty Trust
(NYSE:HR)
Rating:49Neutral
Price Target:―
Positive Factors
Earnings
Normalized FFO per share beat the Street expectations, showing stronger performance in earnings.
Financial Performance
FAD per share beat the Street's expectations.
Negative Factors
Dividend Policy
A potential ~20% dividend cut is likely towards a benchmark 80% AFFO payout ratio.
Leadership
There is no update on the CEO search process, creating uncertainty in leadership.
Healthcare Realty Trust (HR) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$5.04B
Dividend Yield8.64%
Average Volume (3M)2.87M
Price to Earnings (P/E)―
Beta (1Y)0.50
Revenue Growth-7.26%
EPS Growth18.45%
CountryUS
Employees550
SectorReal Estate
Sector Strength64
IndustryREIT - Healthcare Facilities
Share Statistics
EPS (TTM)-0.13
Shares Outstanding351,423,460
10 Day Avg. Volume2,830,268
30 Day Avg. Volume2,869,337
Financial Highlights & Ratios
PEG Ratio-0.35
Price to Book (P/B)1.04
Price to Sales (P/S)0.00
P/FCF Ratio25.72
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$17.00Price Target Upside18.47% Upside
Rating ConsensusHold
Number of Analyst Covering7
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 shows mixed financial performance. Strong cash flow management and cost control are evident from positive free cash flow and high EBITDA margins. However, the company is struggling with profitability due to high operational expenses, leading to net losses. The balance sheet has improved leverage, but negative ROE indicates profitability concerns.Income Statement
The company has shown a declining revenue trend with a negative revenue growth rate in recent years. The gross profit margin for the TTM is at 47.0%, indicating a strong ability to manage direct costs. However, the net profit margin is significantly negative due to ongoing net losses, suggesting challenges in managing operational and other expenses. The EBIT and EBITDA margins are 15.1% and 61.7% respectively for the TTM, indicating some operational efficiency but not enough to cover all expenses, leading to net losses.42
Neutral
Balance Sheet
The debt-to-equity ratio has improved to 0.06 in the TTM from 0.95 in the previous year, indicating reduced leverage. The return on equity is negative due to net losses, impacting shareholder returns. The equity ratio stands at 48.4%, reflecting a balanced asset financing between liabilities and equity.55
Neutral
Cash Flow
Free cash flow has shown growth, with a positive free cash flow growth rate in the TTM. The operating cash flow to net income and free cash flow to net income ratios are positive, indicating that despite net losses, the company generates sufficient cash flows from operations to cover its investments and financing needs.60
Neutral
| Breakdown | |||||
| TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 1.22B | 1.25B | 1.34B | 932.64M | 534.82M | 499.63M | Gross Profit |
| 579.51M | 772.59M | 112.62M | 588.60M | 322.54M | 303.12M | EBIT |
| 43.29M | 36.60M | 54.22M | 77.84M | 84.88M | 79.37M | EBITDA |
| 607.44M | 711.56M | 780.51M | 555.62M | 287.60M | 274.18M | Net Income Common Stockholders |
| -391.06M | -654.49M | -278.26M | -106.00M | 14.32M | 19.19M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 25.72M | 68.92M | 25.70M | 60.96M | 13.18M | 15.30M | Total Assets |
| 10.50B | 10.65B | 12.64B | 13.85B | 4.26B | 3.81B | Total Debt |
| 5.03B | 4.96B | 5.30B | 5.70B | 1.92B | 1.71B | Net Debt |
| 5.00B | 4.89B | 5.27B | 5.64B | 1.91B | 1.70B | Total Liabilities |
| 5.35B | 5.35B | 5.71B | 6.17B | 2.07B | 1.86B | Stockholders Equity |
| 5.08B | 5.23B | 6.82B | 7.57B | 2.19B | 1.95B |
| Cash Flow | Free Cash Flow | ||||
| 205.53M | 252.64M | 268.79M | 109.20M | 131.94M | 376.13M | Operating Cash Flow |
| 473.25M | 501.62M | 499.82M | 272.75M | 232.63M | 470.09M | Investing Cash Flow |
| 920.65M | 900.92M | 349.14M | 1.63B | -562.47M | -555.17M | Financing Cash Flow |
| -1.39B | -1.36B | -884.22M | -1.86B | 327.72M | 99.72M |
Healthcare Realty Trust Technical Analysis
Negative
14.35
Price Trends
15.47
Negative
15.74
Negative
16.29
Negative
Market Momentum
-0.26
Positive
36.75
Neutral
6.82
Positive
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 14.35 is below the 20-day moving average (MA) of 14.89, below the 50-day MA of 15.47, and below the 200-day MA of 16.29, indicating a bearish trend. The MACD of -0.26 indicates Positive momentum. The RSI at 36.75 is Neutral, neither overbought nor oversold. The STOCH value of 6.82 is Positive, 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 2 New Risks
1.
The Company's results of operations have been and will continue to be impacted negatively by the Steward Health and Prospect Medical bankruptcies. Q4, 2024
2.
The Company's success depends, in part, on its ability to attract and retain talented employees. The loss of any one of the Company's key personnel or the inability to maintain appropriate staffing could adversely impact the Company's business. Q4, 2024
Healthcare Realty Trust Peers Comparison
Overall Rating
UnderperformOutperform
Sector (60)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | $5.48B | 31.16 | 7.02% | 4.21% | 43.27% | 80.97% | |
76 Outperform | $3.38B | 23.00 | 10.56% | 4.97% | 7.44% | 4.23% | |
76 Outperform | $4.15B | 29.52 | 5.15% | 7.02% | 7.81% | 179.16% | |
72 Outperform | $5.54B | ― | -1.93% | 2.91% | 11.66% | ― | |
60 Neutral | $2.76B | 10.33 | 0.49% | 8508.28% | 5.95% | -17.56% | |
49 Neutral | $5.04B | ― | -6.83% | 8.64% | -7.26% | 18.45% | |
44 Neutral | $2.74B | ― | -28.86% | 8.52% | 19.56% | -12.73% |
* Real Estate Sector Average
Performance Comparison
HR
Healthcare Realty Trust
14.35
-0.23
-1.58%
NHI
National Health Investors
72.47
10.81
17.53%
SBRA
Sabra Healthcare REIT
17.44
4.14
31.13%
MPW
Medical Properties
4.58
-0.15
-3.17%
CTRE
CareTrust REIT
28.60
4.47
18.52%
AHR
American Healthcare REIT, Inc.
34.33
20.87
155.05%
Healthcare Realty Trust Earnings Call Summary
Earnings Call Date:May 01, 2025
(Q1-2025)
| % Change Since: -7.84%|
Next Earnings Date:Aug 12, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mixed outlook with strong leasing performance and financial results being overshadowed by high leverage and dividend coverage concerns. While the company is actively working on reducing leverage and optimizing its portfolio, these efforts may lead to earnings dilution. However, the strong demand for outpatient medical space and a high-quality portfolio in growth markets provide a positive foundation.Q1-2025 Updates
Positive Updates
Strong Leasing Activity
Commenced nearly 1.5 million square feet of new and renewal leases with a solid pipeline of over 630,000 square feet, indicating robust demand for outpatient medical space.
Positive Financial Performance
Normalized FFO per share was $0.39 for the quarter, in line with expectations. Same-store cash NOI growth was 2.3%, with expectations for material acceleration in the remainder of the year.
Successful Dispositions
Sold four buildings for $28 million and received full payoff of an outstanding loan for $38 million, reflecting strong execution by the team.
High-Quality Portfolio
The portfolio is focused on high growth markets including Dallas, Seattle, Nashville, Houston, and Denver, with a tenant roster comprising market-leading health systems.
Increased Health System Leasing
Health system leasing as a percentage of new signed lease activity has nearly doubled over the past five quarters, showcasing strong demand from health partners.
Negative Updates
High Leverage Concerns
Net debt to adjusted EBITDA remains high at 6.4 times, with a focus on reducing leverage to improve balance sheet capacity.
Dividend Coverage Concerns
The dividend payout ratio is elevated, and future adjustments are being discussed due to the need for clarity on earnings profile and efficiency gains.
Occupancy Challenges
Same-store occupancy was at 89.3%, with a target to increase to the low 90% range, indicating room for improvement in leasing efforts.
Potential Dilution from Asset Sales
There is a focus on selling assets to optimize the portfolio, which may lead to earnings dilution, although efforts are being made to offset this through efficiencies and leasing upside.
Company Guidance
During the Healthcare Realty First Quarter 2025 Earnings Conference Call, several key metrics and strategic focuses were outlined. Same-store occupancy was at 89.3%, with expectations to increase it to the low 90% range, capturing a potential 200 to 300 basis points of upside. The company executed nearly 1.5 million square feet of new and renewal leases in the quarter, and the signed not occupied pipeline accounted for over 630,000 square feet. Normalized FFO per share was $0.39, in line with expectations, and same-store cash NOI growth was 2.3%. The company reaffirmed its full-year normalized FFO per share guidance of $1.56 to $1.60. Moreover, Healthcare Realty sold four buildings for $28 million and expects increased disposition activity in the second quarter. The company also focused on deleveraging, with net debt to adjusted EBITDA unchanged at 6.4 times, aiming to decrease it to a range of 6 to 6.25 times by year-end. The dividend was maintained at $0.31 per share, with discussions ongoing at the Board level regarding its future, contingent on the company's strategic plan outcomes.Healthcare Realty Trust Corporate Events
Executive/Board ChangesShareholder Meetings
Healthcare Realty Trust Appoints New Director and CEO
Neutral
May 22, 2025
On May 20, 2025, Healthcare Realty Trust‘s Board of Directors appointed Peter A. Scott as a director and increased the board size to 12 members, with plans to reduce it in the future. Mr. Scott, who became the company’s President and CEO on April 15, 2025, will serve on the Capital Allocation Committee. At the annual stockholders’ meeting on May 20, 2025, several directors were elected, and key proposals, including the ratification of BDO USA, P.C. as the independent accounting firm and executive compensation, were approved.
The most recent analyst rating on (HR) stock is a Buy with a $20.00 price target. To see the full list of analyst forecasts on Healthcare Realty Trust stock, see the HR Stock Forecast page.
Executive/Board ChangesDividendsBusiness Operations and StrategyFinancial Disclosures
Healthcare Realty Trust Appoints New President & CEO
Neutral
May 1, 2025
Healthcare Realty Trust reported a net loss of $44.9 million for the first quarter of 2025, with a normalized FFO per share of $0.39. The company declared a quarterly dividend of $0.31 per share and announced leadership changes with Peter A. Scott appointed as President & CEO. The company also highlighted a slight increase in same-store occupancy and tenant retention, alongside significant leasing activity and asset sale transactions.
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.
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.
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.