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EPR Properties: A Buyout Candidate As Recovery Continues And America's Vaccination Effort Surges

Mar. 05, 2021 3:17 PM ETEPR Properties (EPR)19 Comments
Pacifica Yield profile picture
Pacifica Yield


  • EPR Properties continues to see rent cash collections rise.
  • The US vaccination effort is surging ahead as a third single-shot vaccine is approved.
  • EPR's shares are still trading at a material discount to its pre-covid peak.

EPR Properties (NYSE:EPR) recently reported earnings for its fiscal 2020 fourth quarter. The company maintained the now established monthly trend of higher cash collections set against rising non-theatre and theatre locations opened. EPR now finds the price of its common share gyrating to the perceived pace of the reopening of America and to the fate of its largest theatre tenant AMC Entertainment (AMC).

The critical foundation of EPR's bull case remains that its malaise over the last year has been somewhat of a temporary product of government stay at home orders and capacity constraints on leisure activities. The reversal of this as well as rising consumer confidence due to the increasingly successful rollout of the Pfizer (PFE)-BioNTech (BNTX), Moderna (MRNA) and now Johnson & Johnson (JNJ) vaccines should help contribute to a recovery of its fundamentals in the months and quarters ahead.

To what extent this pulls up the price of EPR's common shares will be dependent on the pace of the recovery and whether the return to normality mirrors the bulls or the bears. The latter has posited that post-pandemic theatre-going will be a relic of a bygone past, while the former has staked a claim of theatres as an important social part of America's social fabric. Hence, while there might be some retrenchment in fringe geographical markets, theatres will keep on going and likely thrive as pent-up demand locked up for the better part of a year gets released.

ChartData by YCharts

EPR's common shares currently trade at $44.47 per share, which is 44% below its pre-covid peak. Assuming the bullish narrative is realized EPR's recovery should see this gap closed.

The US Vaccination Effort Continues At Pace

The US daily vaccination rate has surged ahead in recent weeks with 2.04 million vaccine doses now being administered daily. This

ChartData by YCharts

This article was written by

Pacifica Yield profile picture
The equity market is an incredibly powerful mechanism as daily fluctuations in price get aggregated to incredible wealth creation or destruction over the long term. Pacifica Yield aims to pursue long-term wealth creation with a focus on undervalued yet high-growth companies, high-dividend tickers, and green energy firms.

Analyst’s Disclosure: I am/we are long EPR. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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