On Monday, Truist Securities initiated coverage on American Healthcare REIT, Inc (NYSE:AHR), issuing a Buy rating alongside a price target of $17.00 for the shares. The firm highlighted the company's diversified operations, which are spread across six segments.
Notably, American Healthcare REIT's net operating income (NOI) is distributed relatively evenly among medical office, skilled nursing, and senior housing segments.
The analyst emphasized the company's significant portion of NOI that comes from integrated senior health campuses, particularly those operated by Trilogy. Trilogy is recognized for its robust performance, high growth in recent times and promising future projections, as well as potential for new development projects.
American Healthcare REIT holds a controlling interest in Trilogy, with an option to increase its share through cash payments or convertible preferred shares.
The company's high exposure to the RIDEA structure is seen as a positive factor, allowing for substantial projected core growth to be reflected in the bottom line. This growth is expected as industry fundamentals continue to bounce back from the impacts of the COVID-19 pandemic and as the demographic trend of an aging population provides additional tailwinds.
The coverage report acknowledged the existence of risks and concerns but concluded that American Healthcare REIT's shares are appealing due to the low stock price relative to the company's growth profile. This assessment suggests confidence in the company's future performance and its ability to navigate the challenges within the healthcare real estate industry.
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