Stifel Downgrades Aviv REIT After Exceeding Price Target

Stifel downgraded Aviv REIT Inc AVIV from Buy to Hold in a report issued Monday.

“Aviv agreed to be acquired by Omega Healthcare Investors for $34.97, a 16 percent premium, in a stock for stock transactions. We are moving from Buy to Hold, having exceeded our price target,” according to analyst Chad Vanacore.

The report calculated “a 6.7 percent implied cap rate on the portfolio, which seems relatively full priced for skilled nursing where individual assets can be acquired for 8-10 percent yields. We see this as an indication of the value of Aviv's ability to source deals and its attractive portfolio of diverse operators. In a larger sense, the transaction affirms portfolio premiums across the healthcare REIT universe.”

The report concluded by noting that the firm “initiated on September 10 with a Buy rating and $31 price target under the thesis that Aviv could source accretive transactions and grow faster than its peers. Our thesis has been borne out in the third quarter and, in light of Aviv's impending acquisition by Omega, we have exceeded that target and are moving to a Hold rating.”

Aviv REIT recently traded at $34.04, up 0.92 percent.