Compass Point reiterated a Buy rating and $19.00 price target on Physicians Realty Trust (NYSE: DOC) following the company's 4Q earnings report. DOC reported AFFO/share of $0.24 for 4Q15, below Compass' estimate of $0.28, but comfortably covering the Company's $0.225 quarterly dividend for the second consecutive quarter. However, Compass does not expect 1Q16 AFFO to cover the dividend, and expects consensus estimates to come down in the near term as the recent capital raise is modeled into estimates.

Analyst Ken Billingsley commented, "We reiterate our Buy rating and $19.00 price target on shares of DOC. Coming off of a quarter in which DOC covered its dividend with AFFO for the second time as a publicly traded company, we are publishing a full model update to account for Management's FY16 acquisition guidance and the company's capital raising efforts in 1Q16. Though we expect to see some temporary dilution from the equity raise and debt offering conducted in 1Q16, we are confident in Management's ability to put the capital to work accretively. However, we do not expect 1Q16 AFFO to cover the dividend, and expect consensus estimates to come down in the near term as the recent capital raise is modeled into estimates. We do expect the company to cover the dividend beginning in the second quarter of 2016. Management has proven itself through the aggregation of a strong operating portfolio sourced through a disciplined investment program, which continues to yield a robust pipeline. As a result of the 1Q16 offerings, the Company has de-levered (debt-to-total assets sits at approximately 15%, compared to 30% historically) and provided itself with the capital base needed to execute on the $750-$1B of acquisitions that management has guided to in 2016."

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Shares of Physicians Realty Trust closed at $17.18 yesterday.