Physicians Realty Trust and Health Care REIT were both given positive analysis by Canaccord Genuity. With an upside averaging over 20% on a total return basis, the REITs in the healthcare sector seem to be faring well despite current market turbulence. Paul Morgan, an analyst at Canaccord Genuity, maintained his $18 price target for Physicians Realty Trust. Adding in the current 5.8% dividend yield, the implied 12-month total return potential is 21%. That is now over 25% considering that Monday’s closing bell price was down 7% at $14.49.
For Health Care REIT, the 2015 and 2016 FFO per share estimates were left unchanged at $4.34 and $4.65, respectively. Paul Morgan updated his model with a $79 price target. He based that on the average of 17 times expected 2016 funds from operations and a 25% premium to forward implied net asset value, mixed with a cap rate of 6.65%. Combined with the current 4.8% dividend yield, the implied total return opportunity over the coming 12 months or so was a potential of 20%. Health Care REIT closed down 3.9% at $65.73, so its total return opportunity is now closer to 25%.
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