Stifel, JMP Securities Review Omega Healthcare Following Mixed Earnings

Stifel and JMP Securities on Wednesday issued a report on Omega Healthcare Investors Inc (NYSE: OHI) after the company reported fourth-quarter earnings that were mixed. While Omega Healthcare's revenue of $131.30 million beat the consensus estimate of $101.12 million, its EPS of $0.68 came in below $0.72 expectations.

Stifel analysts Chad Vanacore, Daniel Bernstein and Elizabeth Moran wrote, "OHI is an improving credit story, with lower risk from increased tenant diversification, increased scale and low cost of capital allowing the company to further diversify its portfolio through highly accretive transactions."

Stifel upgraded Omega Healthcare to Buy with a $44 price target.

Discussing their valuation of Omega Healthcare Investors, Peter Martin and Aaron Hecht of JMP Securities wrote, "Given strong coverage ratios, leverage levels which have been brought in line compared to its peers, a lock on the secondary market SNF transaction pipeline, and a strong and profitable capex capital deployment program expected for the next decade, we believe OHI shares remain fairly valued at this time."

According to the firm's FTM NAV estimate, the stock has a 25 percent upside which can also be traced to Omega Healthcare anticipated merger with AVIV REIT Inc. (NYSE: AVIV), which is expected to be completed by the second quarter of 2015.

Shares of Omega Healthcare recently traded at $41.28, up 3 percent.