Stifel Downgrades Ventas To Hold, Cites Slower Growth

Stifel recently issued a company report on Ventas, Inc.

after analysts reduced company estimates based on slowing growth assumptions. Analysts at Stifel downgraded Ventas from Buy to Hold while a price target is currently unavailable. Chad Vanacore and Seth Canetto, analysts at Stifel, wrote, "We are lowering our rating from Buy to Hold assuming a slowing growth rate on fewer acquisitions and slowing organic growth. We reduced our external investment forecast, seeing a more challenging acquisition environment in 2016...believe public REITS are less likely to pay premium prices, so they will slow their growth through acquisitions. Analysts at Stifel cited 2 key reasons why they downgraded Ventas: 1. Challenging Acquisition Environment Analysts at Stifel noted that there is a disconnect between what public buyers are willing to pay for properties and the premium prices that sellers are expecting. Furthermore, the rising costs of capital have slowed the pace of acquisitions, which puts pressure on public REITs such as Ventas who may be unlikely to pay high prices for investment properties. 2. Low margin growth Stifel believes that with the increasing costs of healthcare employees, particularly those at senior housing facilities, expense growth for healthcare REIT's may increase, leading to a strain on operating margins. Ventas is currently trading at $48.71, up 0.58 percent.