Piper downgrades Community Healthcare to Neutral as acquisition pipeline slows

As previously reported, Piper Sandler downgraded Community Healthcare to Neutral from Overweight with a price target of $26, down from $36, as the acquisition pipeline has slowed down due to recent interest rate volatility. The firm believes in Community Healthcare’s business model longer term but given the experience post-COVID when rates went to zero and the current market rate adjustment period, it seems Community Healthcare is either outbid by cheaper capital or finds sellers on the sidelines during periods of interest rate oscillation. Piper doesn’t see a catalyst in the near term until the path to a sustainable $120M-$150M annual pipeline tangibly returns.