Wells Fargo Downgrades Omega Healthcare Investors (OHI) to Equal Weight

Wells Fargo analyst John Kilichowski downgraded Omega Healthcare Investors (NYSE: OHI) from Overweight to Equal Weight with a price target of $45.00.

The analyst comments "We're downgrading OHI to EW with an $45 PT. We see valuation as full here with the revisions to earnings following Genesis, expected higher dispositions, and increased MA/ Medicaid concerns. We see more attractive GARP from OWs CTRE & SBRA. Genesis Resolution Worse than Expected: As a reminder, Genesis is 4.6% of OHI's annualized rent/interest and filed for Ch11 on 7/9/25 to address malpractice claims. The original stalking horse bidder was expected to retain funding from OHI; however, on 1/20, a judge ruled that Genesis would be sold to 101 West. The new buyer is not expected to take on OHI's $125m term loan at 13.2%; at $4.4m/Q (~$4m PIK, $400k cash) we estimate full year dilution of ~5c CFFO/1c AFFO. The term loan is secured by a first lien on the equity of 4 of Genesis' ancillary businesses, and while OHI believes its credit position is strong, we still need to monitor the tail risk of potential non-repayment. Our current estimates include repayment of the term loan by 3Q26. OHI also expects to get back its $8m of DIP financing at the close as well, and to continue to receive full rent ($52m on 31 assets) through the transition. As of July these assets were covering at ~1.6x."

For an analyst ratings summary and ratings history on Omega Healthcare Investors click here. For more ratings news on Omega Healthcare Investors click here.

Shares of Omega Healthcare Investors closed at $43.16 yesterday.

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