This Analyst Turns Bullish On Healthpeak Properties, Sees Growth Prospect From Strong Tenant Base

Mizuho Securities analyst Vikram Malhotra upgraded Healthpeak Properties Inc PEAK to Buy from Neutral and decreased the price target to $25 from $29.
The analyst believes that PEAK's tenant base is strong from a cash runway perspective, and credit issues risks are small and manageable.
Malhotra believes PEAK’s strong MOB portfolio comprises over 37% of NOI and offers strong growth and shields amid the deteriorating economy.
Although the company is looking to lease its Gateway project, the analyst notes that PEAK's major properties are leased to companies with solid cash runways.
The analyst believes the company's development portfolio of $750 million has considerable growth potential and expects to deliver during the next 12 months 75% preleased.
The analyst sees a weakening life sciences funding environment, probable credit issues risk on diminishing cash runways of tenants and an over-supplied real estate market as a matter of concern.
Malhotra expects adjusted FFO for FY23 to be $1.44 (compared to the company's guidance of $1.45 to $1.51 and consensus of $1.47), for FY24 to be $1.51 (vs consensus of $1.57).
The analyst expects occupancy in the Life Sciences segment to decline 150bps on average during 2023-24 and sales growth in MOB portfolio to be 2%-3% per annum.
Price Action: PEAK shares are trading higher by 0.59% at $21.25 on the last check Monday.

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