Sabra Health Care upgraded to Overweight from Equal Weight at Wells Fargo

Wells Fargo upgraded Sabra Health Care to Overweight from Equal Weight with a price target of $20, up from $16, following analyst coverage transfer. While the firm originally saw Sabra Health Care’s Q2 earnings as a very positive step in the right direction, Wells were caught off guard by the markets more negative response to what it saw as a clean quarter. Sabra Health Care battled a tighter cost of capital spread than peers, but the recent stock price performance has made its cost of equity attractive enough to compete with peers, the firm adds. Wells also expects the higher-levered names to be outsized beneficiaries from any continued Fed rate cuts, which gives it confidence in its ability to hit the flat-to-bull case of the analysis.