UPDATE: Stifel Downgrades HCP Amid Tough Deal Environment

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In a report published Tuesday, Stifel analyst Robert Mains downgraded the rating on
HCPHCP
from Buy to Hold, and removed the $48.00 price target. In the report, Stifel noted, “As we discussed in our review of last week's NAREIT conference, ‘NAREIT Conference Confirms Investment Opportunities, But Increased Competition,' acquisition cap rates for large portfolios, particularly private pay senior housing and medical office buildings, remain stubbornly low. This, we feel, will impede growth via accretive acquisitions. We have lowered our 2014 estimates for HCP's investments and, as a consequence, our FFO and FAD estimates. We have lowered our 2014 FFO estimate from $3.01 to $2.97 and our FAD estimate from $2.56 to $2.52. We are lowering our 2015 FFO estimate from $3.17 to $3.10 and our FAD estimate from $2.74 to $2.67 even though we have not changed our 2015 acquisition assumptions; the reduction reflects the impact of four quarters of lower-than-previously modeled external growth in 2014.” HCP closed on Monday at $39.71.
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Posted In: Analyst ColorDowngradesAnalyst RatingsRobert MainsStifel
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