Analyst Tom Callaghan of BMO Capital maintained a Hold rating on NorthWest Healthcare Properties REIT, with a price target of C$5.00.
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Tom Callaghan has given his Hold rating due to a combination of factors that reflect both positive developments and ongoing uncertainties for NorthWest Healthcare Properties REIT. The company has made strides in improving its balance sheet by reducing high-cost variable debt and achieving an investment-grade credit rating. These efforts have placed the REIT on a more stable financial footing, with a significant portion of its debt now at fixed rates. However, the REIT still faces challenges, particularly in terms of reducing leverage further and simplifying its geographic structure.
Another factor influencing the Hold rating is the uncertainty surrounding Healthscope, a significant tenant for NorthWest Healthcare Properties REIT. The ongoing sales process for Healthscope, which is in receivership, adds an element of unpredictability to the REIT’s future income. Despite having a strong portfolio characterized by long-term cash flow stability and favorable demographic trends, the REIT’s progress is seen as gradual rather than transformative. These factors combined lead to a cautious outlook, warranting a Hold recommendation.
Callaghan covers the Real Estate sector, focusing on stocks such as Storagevault Canada, Chartwell Retirement Residences, and PRO Real Estate Investment. According to TipRanks, Callaghan has an average return of 11.5% and an 86.84% success rate on recommended stocks.