UPDATE: Compass Point Initiates Coverage on Physicians Realty Trust with Buy Rating, $13 PT on Healthy Growth Strategy

In a report published Tuesday, Compass Point analyst Wilkes Graham initiated coverage on

with a Buy rating and $13.00 price target. In the report, Compass Point noted, “We are initiating coverage on DOC with a Buy rating and a $13.00 price target. DOC went public on July 18, 2013 via an IPO that raised $135 million in gross proceeds. The initial portfolio comprises 19 medical office buildings and DOC intends to acquire up to $240 million in healthcare facilities in the coming quarters. DOC management plans to pay a $0.90/share common dividend which, upon full capital deployment, will be covered by both our 2014 AFFO and CAD estimates. Strong macro tailwinds should exist in the healthcare industry for decades to come, as the fragmented nature of healthcare real estate ownership should allow for higher returns, and the Affordable Care Act (ACA) appears destined to benefit DOC's growth strategy. We believe that if the company can successfully execute on its growth strategy at average 8.5% cap rates, the stock will trade to at least our price target, which including the expected dividend represents 20% upside.” Physicians Realty Trust closed on Monday at $11.62.