LTC Properties upped at BMO to Market Perform, as downside risk gets reduced (NYSE:LTC)

LTC Properties (NYSE:LTC) stock is climbing nearly 4% in Tuesday morning trading as BMO analyst Juan Sanabria upgraded the healthcare REIT to Market Perform from Underperform on the basis of reduced downside risks.

The company “remains cautiously optimistic with occupancy having bottomed and agency costs moderating, although inflation cost pressures remain,” Sanabria wrote in a note.

Sanabria pointed to prospects for LTC Poperties’ (LTC) tenant risk getting smaller, citing recent transitions and assets sales alongside improving fundamentals.

In turn, the analyst is forecasting 2023 adjusted FFO growth of +9.2% on a Y/Y basis, driven by “rent collection normalization after needed transitions & dispositions have been largely completed to clean up the portfolio” and de-risk net operating income, the note said.

By comparison, SA’s Quant Rating screens LTC Properties (LTC) as a Buy, with the best mark in momentum. Shares of the REIT are up more than 10% YTD. The Average Wall Street Analyst, though, views it as a Hold (1 Strong Buy, 7 Hold, 2 Sell).

On the flip side, BMO analyst John Kim has cut National Health Investors (NYSE:NHI), another healthcare REIT, to Market Perform from Outperform, as “we believe acquisition activity will remain muted until prices adjust,” he wrote in a note.

Kim also pointed out that National Health Investors’ (NHI) skilled nursing facility portfolio is high quality, though “we remain cautious on SNFs given fading government support, regulatory pressures & a looming CMS rate cut.”

Shares of NHI are rising almost 1% despite the downgrade.

SA contributor Avisol Capital Partners in mid-April said NHI has an attractive dividend yield, but “earnings are lower than they should be.”

Looking at SA’s screen for health-care REITs, LTC Properties comes in first place followed by Omega Health Investors (NYSE:OHI) and Sabra Health Care (NASDAQ:SBRA).