UPDATE: JMP Securities Reiterates Market Outperform Rating, Lowers PT on Brookdale Senior Living on Continued Positive Long-Term Outlook

In a report published Tuesday, JMP Securities analyst Peter L. Martin reiterated a Market Outperform rating on

, but lowered the price target from $46.00 to $44.00. In the report, JMP Securities noted, “We maintain our Market Outperform rating following Brookdale Senior Living's (BKD) negative 2015 guidance revision based on our continued positive long-term outlook for the company. However, we lower our price target to $44 based on 12x EV/Adj. EBITDAR and a 20% discount on our expected ESC accretion target vs. our prior estimates of $46 on 12.5x and a 10% discount rate given near-term operational issues. BKD pre-announced 4Q14 CFFO expectations below consensus, and lowered its original 2015 CFFO guidance to $2.60-$2.75 vs. $2.95-$3.10 due to lower than expected occupancy, higher than expected healthcare expenses and professional liability insurance reserves, as well as a shift in its capex spend. Management identified legacy Emeritus facilities as the primary occupancy issue, but absorption levels at legacy Brookdale facilities gives us pause given its second quarter of underperformance. The magnitude vs. our model (EBITDAR basis) was not great given our expectation of a tough first year transition, but the front-loading of maintenance capex to help transition performance issues did hurt our CFFO forecast.” Brookdale Senior Living closed on Monday at $33.92.