3 Highest Benefit Healthcare REITs, According to Analysts


The real estate investment trust (REIT) The sector has been hit particularly hard in 2022, but analysts are starting to see value in the precipitated prices of these stocks. Lately, they’re forecasting big upward target prices. Following are three healthcare REITs that analysts believe have the highest upside potential from current levels:

Healthpeak Properties Inc. (NYSE: PEAK) is a Denver-based REIT that owns and operates private payment facilities such as life science centers, medical offices, and senior housing. The original company name was Health Care Property Investors, which launched its first public offering (IPO) in 1985 and was added to the S&P 500 in 2008. Healthpeak owns more than $20 billion in healthcare real estate.

Healthpeak’s 52-week range is $23.23 to $36.85, but the stock is now down 28% from nearly $35 in April. Barclays analyst Steve Valiquette recently maintained his overweight rating on Healthpeak, but lowered his price target to $36 from $38. At the recent price of $24.75, that represents a notable upward target of 45.5%.

Healthpeak pays an annual dividend of $1.20, which equates to a 4.8% return. In its latest quarterly report, it beat Wall Street estimates for both earnings and funds from operations (FFOs) and announced a new $500 million share repurchase program. These are all positive points that could turn out to be beneficial for Healthpeak in the coming year.

Also see: This little-known REIT has delivered double-digit annual returns for the past five years

Welltower Inc. (NYSE: GOOD) is a Toledo, Ohio-based healthcare REIT that owns senior housing facilities, post-acute care providers, and ambulatory care systems in the US, Canada, and the UK

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Welltower shares peaked near $98 in April, but have since fallen nearly 29% to nearly $70. Revenue and earnings per share (EPS) have risen steadily since the fourth quarter of 2021, but The Street seems to care more about rising interest rates than about earnings per share.

Two analysts have recently written positively about Welltower. Derek Johnston of Deutsche Bank Security maintained a buy recommendation for Welltower even as he lowered his price target from $100 to $93. At a recent price of $70, this represents 33% of the target’s upside potential.

Morgan Stanley’s Ronald Kamdem restored his overweight position in Welltower, with a price target of $90, so he’s looking for 29% upside potential.

Given its recent performance, Welltower’s price drop seems like an example of throwing the baby out with the bathwater. If the analysts are right, Welltower could expect significant appreciation along with its $2.44 annual dividend yielding about 3.5%.

Healthcare Realty Trust Inc. (NYSE: HR) is a Nashville, Tennessee-based REIT that owns and develops outpatient healthcare in the US. It was formed through a merger between Healthcare Realty Trust and Healthcare Trust of America in July 2022. The merger created a company with more than 700 properties totaling approximately 44 million square feet in the U.S.

Healthcare Realty has a 52-week price range from $22.45 to $34.83. The annual dividend of $1.24 yields 5.3%. While second-quarter sales rose, earnings per share were down more than 72% from the previous quarter. As a result, the stock has fallen about 20% since the June announcement.

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However, Citi analyst Michael Bilerman recently upgraded Healthcare Realty Trust to buy from Neutral and raised its price target from $27 a share to $28. At a recent price of $23.14, his view represents a 21% increase.

Investors are cautioned to do their own research before buying stocks, and while analyst ratings are helpful, investors should not fully rely on them to be accurate. Many analysts are only right about 50% of the time.

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