UPDATE: Morgan Stanley Initiates Coverage on Aviv REIT with Equal-Weight Rating, $26 PT on Balanced Risk-Reward

In a report published Monday, Morgan Stanley analyst Paul Morgan initiated coverage on Aviv REIT

with an Equal-Weight rating and $26.00 price target. In the report, Morgan noted, “Aviv REIT completed its IPO on March 21st and with the stock up 22% since pricing, we see risk-reward as currently balanced and initiate with an Equal-weight rating and $26 price target. Despite the post-IPO run-up, our $1.44/share dividend expectation implies an attractive 5.9% yield (vs. 3.0% for the REIT sector). At a 35% premium to Net Asset Value, Aviv should be able to grow FFO accretively through acquisitions, as has been the company's track record as a private entity. We model $320M in SNF acquisitions at a 10% yield through 2014, driven by expanding relationships with Aviv's existing tenant base. We believe Aviv is positioned favorably relative to direct comp Omega Healthcare given lower leverage and asset base.” Aviv REIT closed on Friday at $24.42.