HCP, Inc. (HCP): The Spin Benefit Is In The Price - UBS
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UBS analyst, Nick Yulico, reiterated his Neutral rating on shares of HCP (NYSE: HCP) since the current valuation factors in the bulk of the benefit from HCP's plan to spin off its skilled nursing assets.
The analyst went on to state that key takeaways from 2Q results include:
1) Cash SSNOI guidance for FY16 was unchanged at 1.5%-2.5%.
2) The focus remains on HCR ManorCare until that portfolio is spun out as its own entity (Quality Care Partners, or QCP)
3) HCRMC's 2Q EBITDAR was flat q/q, but TTM fixed charge coverage was barely
above 1.0x (1.03x vs. 1.06x in 1Q).
4) EBITDAR at HCRMC remains under pressure due to tough operator occupancy and a shift to managed care.
The price price target increases to $38.00 from $35.00.
Shares of HCP closed at $39.42 yesterday.
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