Sabra Health Care stock climbs after Mizuho upgrades to Buy on occupancy trend

May 25, 2022 10:52 AM ETSabra Health Care REIT, Inc. (SBRA)By: Liz Kiesche, SA News Editor4 Comments

They"re a cheerful bunch of seniors

shapecharge/E+ via Getty Images

  • Sabra Health Care (NASDAQ:SBRA) stock is gaining 3.5% in Wednesday morning trading after Mizuho Securities USA analyst Vikram Malhotra upgraded the nursing home landlord to Buy from Neutral. He notes that occupancy rates are slowly improving and the high likelihood that the public health emergency will be extended, which means government support of the sector will continue.
  • "We see occupancy slowly but steadily improving, with a low bar amongst the investor community," Malhotra wrote in a note to clients. Occupancy at Sabra's (SBRA) top seven tenants was 76.5% as of March 2022, up from 74.6% in January and 75.7% in mid-2021, the analyst pointed out.
  • Elective surgeries, a leading indicator for skilled nursing facilities' occupancy, are also "moving in the right direction," he said. He expects that increasing occupancy and ongoing government support should help Sabra's (SBRA) tenants offset several negatives.
  • Mizuho's sensitivity analysts also suggest that the REIT's dividend is covered in their base and bull cases.
  • See where Sabra (SBRA) ranks among health care REITs using the SA stock screener.
  • Malhotra's Buy rating leans more bullish than the Quant rating of Hold and agrees with the average Wall Street rating of Buy.
  • SA contributor Avisol Capital Partners is more cautious on Sabra (SBRA), noting strong and steady income with a dose of uncertainty

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