The qualified audits of skilled nursing operators Genesis Healthcare and Signature Healthcare have raised concern about the sector among some investors. But one investment banking firm is predicting strong third-quarter earnings for skilled nursing focused real estate investment trusts such as Omega Healthcare Investors and Sabra Health Care REIT. That’s according to an analysis in GlobeSt.com this week.
The media outlet reports that thanks to $14.6 billion in government support to prop up the long-term care industry, Mizuho Securities expects skilled nursing tenants to continue to fulfill rent obligations. In fact, Mizuho recently raised its earnings estimates and price targets for Omega, Sabra and CareTrust REIT.
The firm also noted that occupancy trends have begun to stabilize as more states begin to reopen and elective surgeries resume. Further, once a vaccine is available, the sector will see a rebound, Mizuho predicted.
“There is currently bipartisan support for skilled nursing, and regardless of the election results, the market should continue to receive support,” the article noted. “Mizuho actually says the strong support for the market might be a silver lining for the industry, which now has the spotlight in front of Congress.”
This article appeared in the McKnight’s Business Daily, a joint effort of McKnight’s Senior Living and McKnight’s Long-Term Care News.