Activist investor Jonathan Litt’s Land & Buildings Investment Management is ready to shake up the board of Ventas (NYSE:VTR), yet again. As per a Wall Street Journal report, Land & Buildings is preparing to send a letter to Ventas’ shareholders seeking to start a proxy fight. An earlier attempt to nominate Litt and other candidates to the board had failed due to a lack of shareholder support.
Here’s Why Litt is Pursuing Ventas
Litt is pushing to improve the operating performance at Ventas and boost shareholder returns. Notably, Ventas has seen its stock price decline by 4.7% in 2023 and 12.5% in the past year. Land & Buildings wants to close the “valuation and performance gap” between Ventas and rival Welltower (NYSE:WELL). Importantly, WELL stock has gained 26.3% so far in 2023, running far ahead of VTR.
Ventas is a real estate investment trust (REIT) that engages in the acquisition and ownership of seniors’ housing and healthcare properties. Meanwhile, Land & Buildings is a REITs-focused private equity firm. Litt’s firm owns roughly $50 million worth of stock in Ventas, amounting to a less than 1% stake in the REIT.
Litt has noted in the letter that his firm is willing to work mutually with Ventas. However, in the absence of support, the activist is willing to take extreme measures. The window for shareholder nomination at Ventas opens from December 18, 2023 to January 17, 2024. In the event of a proxy fight, Litt could nominate multiple directors to Ventas’ Board of Directors.
Is VTR a Good Stock to Buy?
Recently, Morgan Stanley analyst Ronald Kamdem raised the price target on VTR to $47 (10.9%) from $45 while maintaining a Hold rating.
Overall, Wall Street remains cautiously optimistic about Ventas’ stock trajectory. On TipRanks, VTR stock has a Moderate Buy consensus rating. This is based on seven Buys versus six Hold ratings received during the past three months. Also, the average Ventas price forecast of $50.92 implies 20.1% upside potential from current levels.
