On Wednesday, Morgan Stanley (NYSE:MS) resumed coverage on Healthpeak Properties (NYSE:DOC), Inc. (NYSE: PEAK), assigning the stock an Equalweight rating with a price target of $23.50. The coverage follows significant changes within the company, including its departure from the senior housing sector and a merger with Physicians Realty (NYSE:DOC_OLD) Trust.
The firm noted that Healthpeak Properties now boasts a more stable and transparent growth outlook, largely due to its focus on Outpatient Medical and Laboratory businesses. The company's development pipeline was also highlighted as a potential source of additional growth.
The analyst from Morgan Stanley pointed out that despite the opportunities for Healthpeak Properties, there are challenges ahead. The life science segment is facing supply headwinds, and the Outpatient Medical business is expected to see modest growth. These factors have influenced the firm's stance on the stock.
The Equalweight rating implies that Morgan Stanley views Healthpeak Properties' stock as adequately valued at its current price, considering the company's prospects and industry conditions. The new price target of $23.50 represents the firm's expectation of where the stock price will move in the medium term.
In other recent news, Healthpeak Properties, Inc. has exceeded its financial targets for the second quarter of 2024, prompting an upward adjustment of its full-year 2024 guidance. This development is attributed to the robust performance of the company's life science and outpatient medical businesses, as well as successful merger integration, which has yielded $45 million in synergies in the first year. Moreover, Healthpeak has fortified its financial position through strategic asset sales and stock repurchases, while maintaining a solid balance sheet.
In addition to these financial highlights, Healthpeak's life science business signed 800,000 square feet of leases, achieving a 6% positive re-leasing spread. The outpatient medical business also experienced increased occupancy and positive re-leasing spreads. The company further sold 900,000 square feet of space leased to CommonSpirit and announced $853 million in outpatient medical asset sales.
These recent developments have led the company to repurchase $88 million of its stock and increase its FFO as adjusted and AFFO guidance. Looking forward, Healthpeak anticipates growth in its MOB portfolio, with new leases expected to have 3% escalators.
The company also plans to manage about 50% of its outpatient and lab business internally by year-end, with lab leasing expected to improve in the second half of the year.
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