UPDATE: Bank of America Reiterates on Brookdale Senior Living Following Strong Quarter & Guidance
In a report published Friday, Bank of America analyst Kevin Fischbeck reiterated a Buy rating on Brookdale Senior Living (NYSE: BKD), and raised the price target from $37.00 to $38.00.
In the report, Bank of America noted, “BKD beat consensus/our CFFO/share est by $0.08/$0.07 on better margins and higher entry fees. In addition, the company guided to 2014 CFFO/sh of $2.68-$2.75, above consensus of $2.66. Solid cost control (ss expenses actually declined 1.5%) continued, driving an impressive ss NOI growth of 12.5%, the best print ever. Occupancy (+40bps y/y and flat q/q), was worse than the industry due to weakness at SNF units. However, rate growth continues to outpace peers at 2.5% vs the industry at +1.6%. We are raising our 2014/15 CFFO estimates (more relevant to BKD than GAAP EPS due to high non-cash D&A) to $2.70/$2.97 from $2.55/$2.81 and rolling out our 2016 CFFO/sh est of $3.07 (this number assumes the company begins paying cash taxes in 2016, although the company could push this out). We are raising our PO to $38 from $37 on higher estimates. BKD is our top Senior living pick as it continues to show better fundamental performance than peers and is also the most levered to the improvements in the housing market/economy.”
Brookdale Senior Living closed on Thursday at $28.67.
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