The senior housing business is approaching its “golden age” and Bookdale Senior Residing ought to profit, based on Jefferies. Analyst Brian Tanquilut initiated protection of Brookdale Senior Residing with a purchase score, saying that the sector ought to profit from higher occupancy as child boomers “age into the candy spot.” “The mix of optimistic demographic developments, improved operations, and monetary engineering … ought to all translate to improved earnings efficiency that is not but baked into the inventory,” he wrote. Together with the improve, Tanquilut established an $8 value goal, reflecting 32% upside from Tuesday’s shut. The inventory is up greater than 4% this 12 months. BKD YTD mountain Shares because the begin of 2024 The agency expects Brookdale to expertise heightened demand that ought to assist speed up earnings as many boomers strategy their late 70s. A slowdown in new building resulting from Covid-19 delays and better prices also needs to profit shares. “As demand re-accelerates resulting from demographics, it can take years to get capability rising once more, which implies that current gamers stand to see elevated occupancy within the near- to med-term,” Tanquilut wrote. “As occupancy picks up, margin leverage ought to emerge for scaled gamers equivalent to BKD.” Tanquilut views upcoming lease renewals as a possible catalyst for shares, whereas the acquisition of once-leased communities ought to enhance margins. He additionally sees the inventory rallying as a lot as 65% as a part of a bull case situation that features quicker-than-expected margin growth and occupancy restoration. Brookdale is not extensively adopted by analysts, with solely 4 protecting it. Of these, two have purchase scores, and the others assigned it an underperform score, LSEG knowledge reveals.
