| Over a month ago | ||||
Reports Q4 revenue… Reports Q4 revenue $144.85M, consensus $156.66M. Taylor Pickett, Omega's Chief Executive Officer, stated, "Our fourth quarter financial performance was materially in line with our prior quarter, as we continued to work through operator restructurings. As we previously announced, our first quarter earnings will be further impacted by deferred rents associated with additional operator restructurings. We expect this will result in a decline in our first quarter earnings and a related increase in our dividend payout ratio. Barring additional unforeseen restructurings, we would expect our operating performance to improve as the year progresses and operator restructurings are completed. However, with both facility occupancy and profitability still meaningfully below pre-pandemic levels, the risk of further operator issues remains." | ||||
Baird analyst David… Baird analyst David Rodgers lowered the firm's price target on Omega Healthcare to $29 from $32 and keeps a Neutral rating on the shares. The analyst said a combination of higher expenses, limited labor availability and challenged occupancy levels are resulting in ongoing rent deferrals, master lease restructuring and interest payment deferrals for Skilled Nursing tenants overall. | ||||
In an investor… In an investor presentation, the company states: "At the end of 3Q22, Healthcare Homes operated 42 Omega-owned care homes in the UK. Operating performance held up quite well during the pandemic, as occupancy declines were more modest than in the US. In addition, the UK government provided financial support to the industry. However, in late 2022, due to the timing of the expiration of their prior utility contracts, energy costs increased in excess of 300%, based on October 2022 financials, which, along with continuing provisions for agency costs, impinged the operator's near-term liquidity. 1) We have agreed to allow a deferral up to 4 months of rent for Healthcare Homes -January through April 2023. In 4Q22 and FY22, Omega received cash rents from Healthcare Homes of GBP 5.0M and GBP 19.8M, respectively. 2) Healthcare Homes may choose not to defer any or all of this rent. 3) We are also providing nominal short-term financing to Healthcare Homes. This restructuring is still ongoing and therefore may be subject to change. As a result of these restructurings, we expect both EBITDA and FAD to decline from 4Q22 to 1Q23. While Agemo is scheduled to resume paying rent in 2Q23, as we continue to work through the restructuring of the operators noted above, EBITDA and FAD will continue to be negatively impacted. This will result in both our dividend payout ratio and our near-term leverage being higher than our historical range during this period of time. However, based on the expected outcomes of these restructurings, we continue to believe that both our dividend payout ratio and our leverage will return to our historical range upon resolution of these operator issues." Reference Link | ||||
Credit Suisse analyst… Credit Suisse analyst Tayo Okusanya downgraded Omega Healthcare to Underperform from Neutral with a $25 price target. The analyst also updated estimates and target prices on 37 REIT stocks and 1 Real Estate Operating Company. | ||||
SMBC Nikko analyst… SMBC Nikko analyst Richard Andreson downgraded Omega Healthcare to Underperform from Neutral with a $27 price target. | ||||
| Over a quarter ago | ||||
BofA analyst Joshua… BofA analyst Joshua Dennerlein downgraded Omega Healthcare to Neutral from Buy with a price target of $33, down from $35. The analyst states that his prior upgrade of the stock reflected expectations that Agemo resolution would result in significant earnings lift, and he sees that thesis now "playing out". Dennerlein adds that new risks have also emerged with Omega Healthcare's Q3 results as its top tenant La Vie has seen its EBITDAR coverage ratio slip below 1x. | ||||
BofA analyst Joshua… BofA analyst Joshua Dennerlein downgraded Omega Healthcare to Neutral from Buy with a $33 price target. | ||||
Reports Q3 revenue… Reports Q3 revenue $239.4M, consensus $247.14M. Taylor Pickett, Omega's Chief Executive Officer, stated, "We have made significant progress in working through our operator restructurings and, by early next year, we expect that a combination of resuming lease payments from restructured operators and repurposed proceeds from asset sales will be reflected in our adjusted FFO and FAD, further enhancing our dividend coverage and leverage metrics." | ||||
