Post by
Zipolitemexico on Sep 02, 2024 12:50pm
Scotia Research (August 15, 2024):
Latest Research (August 15, 2024):OUR TAKE: Mixed. NWH unit price was down ~5% yesterday as market focus was on Q2 miss (details on page 7), while UK portfolio sale was completely overlooked. We think UKportfolio sale has materially improved the risk profile, and as such we expect valuation discount to narrow.
NWH is now trading at 30% discount to NAV (Exhibit 4) and 8.1% implied cap rate (Exhibit 9). Our 12-month targetis $6.50, which is largely based on our NAVPU of $6.75 (unchanged) and implies 9.7x 2025E AFFO multiple.NWHdistribution yield is 7.6% and implies AFFO payout ratio (Exhibit 2) of 90% in 2024 and 74% in 2025. So, we thinkdistribution is fully covered. Leverage (Exhibit 5) reduction at 55% vs 61% in Q2 and 59% last year. Leverage iselevated but has come down on $1.6B of asset dispositions in the last one year. 2025 debt maturities have reduced to 27% (as % of total debt) vs 42% previously. We maintain our SP rating as we see FFOPU y/y growth (beginning from Q1/25 and still y/y declines in Q3/24 and Q4/24. We see $5 as the new floor,and the stock could move towards $6 as 2025 earnings growth is visible