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Deutsche upgrades Healthpeak Properties stock to buy, cuts PT to $135

EditorIsmeta Mujdragic
Published 10/21/2024, 12:38 PM
DOC
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On Monday, Healthpeak Properties (NYSE:DOC) Inc (NYSE:PEAK) received an upgrade in stock rating from Deutsche Bank, moving from Hold to Buy. The firm also adjusted the price target for the company's shares to $135.00, a decrease from the previous target of $140.00. The revised price target reflects a new valuation after considering a range of factors that are influencing the company's performance and outlook.

The upgrade comes as a result of several positive developments within Healthpeak Properties. The analyst noted an increase in the firm's funds from operations (FFO) per share estimates for the years 2024 to 2026. The new FFO estimates are now $1.80, $1.87, and $1.95, a slight rise from the earlier projections of $1.80, $1.86, and $1.93, respectively.

This adjustment is based on a combination of factors, including better-than-expected leasing results in the second quarter of 2024 and an anticipated improvement in the leasing environment.

Additionally, Healthpeak's capital recycling efforts and the ahead-of-schedule integration process with Physicians Realty (NYSE:DOC_OLD) Trust were highlighted as contributing to the positive outlook. The integration process is expected to enhance the company's operational efficiency and financial performance.

The analyst also pointed to the current interest rate outlook as a favorable condition for Healthpeak Properties. A meaningful decline in the stock's beta was cited as a driving force behind the new price target.

This decline is attributed to the company's exposure to a stable Medical Office Building (MOB) portfolio, which comprises approximately 56% of the total net operating income (NOI), combined with lower rates and solid execution in the first half of 2024.

The report concludes with a reaffirmation of the new rating and price target, indicating confidence in Healthpeak Properties' prospects and its ability to navigate the current market conditions effectively.

In other recent news, Healthpeak Properties has been a focal point of several analyst firms. Mizuho Securities increased its price target on Healthpeak Properties to $25.00, maintaining its Outperform rating, reflecting revised funds from operations estimates for the company.

JPMorgan also revised its model for the company, increasing the price target to $24.00 while maintaining a Neutral rating. Scotiabank reaffirmed a Sector Outperform rating on Healthpeak shares, driven by potential in the company's Lab segment, and increased the price target to $24.00.

In addition to these adjustments, Citi updated its price target for Healthpeak to $22 while maintaining a Neutral stance. Baird also increased its price target for Healthpeak to $24.00, citing operational management strength, lab improvements, and merger synergies. RBC Capital and Evercore ISI raised their price targets for Healthpeak Properties to $25 and $24, respectively, maintaining Outperform ratings.

In terms of corporate developments, Healthpeak Properties has completed a merger with Physicians Realty, bringing additional scale and tenant relationships. The company also fully acquired King Street Properties' minority stake in their joint venture, expanding Healthpeak's greater Boston portfolio to a total of 2.7 million square feet.

These are recent developments in the company's operations.

InvestingPro Insights

Adding to Deutsche Bank's positive outlook on Healthpeak Properties Inc (NYSE:PEAK), recent data from InvestingPro provides further context to the company's financial position and market performance.

PEAK's revenue growth of 13.99% over the last twelve months, coupled with a strong quarterly revenue growth of 27.51% in Q2 2024, aligns with the analyst's optimistic FFO projections. This growth trajectory supports the InvestingPro Tip that analysts anticipate sales growth in the current year.

The company's dividend yield stands at an attractive 5.3%, with an ex-dividend date of August 5, 2024. Notably, an InvestingPro Tip highlights that Healthpeak has maintained dividend payments for 40 consecutive years, underscoring its commitment to shareholder returns and financial stability.

PEAK's stock has shown significant momentum, with a 29.73% price total return over the past six months and a 45.32% return over the last year. This performance has brought the stock price to 97.84% of its 52-week high, corroborating the InvestingPro Tip that the stock is trading near its 52-week high.

For investors seeking a more comprehensive analysis, InvestingPro offers 7 additional tips for Healthpeak Properties, providing a deeper understanding of the company's financial health and market position.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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