- Mizuho Securities analyst Vikram Malhotra upgraded Healthpeak Properties Inc PEAK to Buy from Neutral and decreased the price target to $25 from $29.
- The analyst believes that PEAK’s tenant base is strong from a cash runway perspective, and credit issues risks are small and manageable.
- Malhotra believes PEAK’s strong MOB portfolio comprises over 37% of NOI and offers strong growth and shields amid the deteriorating economy.
- Although the company is looking to lease its Gateway project, the analyst notes that PEAK’s major properties are leased to companies with solid cash runways.
- The analyst believes the company’s development portfolio of $750 million has considerable growth potential and expects to deliver during the next 12 months 75% preleased.
- The analyst sees a weakening life sciences funding environment, probable credit issues risk on diminishing cash runways of tenants and an over-supplied real estate market as a matter of concern.
- Malhotra expects adjusted FFO for FY23 to be $1.44 (compared to the company’s guidance of $1.45 to $1.51 and consensus of $1.47), for FY24 to be $1.51 (vs consensus of $1.57).
- The analyst expects occupancy in the Life Sciences segment to decline 150bps on average during 2023-24 and sales growth in MOB portfolio to be 2%-3% per annum.
- Price Action: PEAK shares are trading higher by 0.59% at $21.25 on the last check Monday.
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