UPDATE: Stifel Nicolaus Downgrades LTC Properties to Hold
Stifel Nicolaus lowers its rating on LTC Properties (NYSE: LTC) to Hold from Buy as shares exceed price target (now pulled).
Stifel Nicolaus comments, "LTC currently trades at 14.8x price to forward twelve months FAD versus a five-year historical average of 13.2x, though we think the multiple expansion is deserved, and at a discount to current median price to forward FAD for all HCREITs of 15.7x. We also calculate LTC currently trades at an implied cap rate of 7.0%, 505 basis points over 10Y Treasuries or 20 bps above the 5-year historical spread and 260 basis points over BBB corporate bonds or 40 bps above the 5-year historical spread. While not expensive in our view relative to bond alternatives, we believe LTC shares do not have enough room for near-term share appreciation to justify keeping our Buy rating."
LTC closed at $32.70 a share on Monday.
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