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Investing.com - UBS initiated coverage on Sabra Healthcare REIT Inc. (NASDAQ:SBRA) with a Neutral rating and a $20.00 price target on Tuesday. The target represents a modest upside from the current price of $18.59, with InvestingPro data showing the stock trading near its 52-week high of $19.97.
The firm noted that Sabra generates 52% of its net operating income from skilled nursing facilities and 28% from senior housing operating properties (SHOP), positioning it ahead of peers seeking to grow SHOP exposure. This portfolio mix has contributed to Sabra’s 9.34% revenue growth over the last twelve months.
UBS believes Sabra should benefit from strong demographic tailwinds, a favorable skilled nursing facility environment, and expanding rent coverage ratios, but considers these positive factors already priced into the shares. InvestingPro analysis indicates the stock is trading close to its Fair Value, with a strong financial health score rated as "GREAT" and an impressive dividend yield of 6.46%. Sabra has maintained dividend payments for 15 consecutive years, making it attractive for income investors.
The research firm highlighted concerns about Sabra’s higher cost of capital, which it calculates drives limited accretion from investments with spreads of approximately 0 basis points, along with what it views as a less differentiated SHOP acquisition strategy and platform. Despite these concerns, Sabra maintains a healthy current ratio of 2.99, indicating its liquid assets comfortably exceed short-term obligations.
UBS forecasts 2026 adjusted funds from operations per share (AFFO/sh) of $1.47 for Sabra, noting that the company’s AFFO/sh growth since 2019 of -21% trails peers like CareTrust REIT (+28%), Omega Healthcare Investors (+4%), and Welltower (+22%). The stock currently trades at a P/E ratio of 25.61, which InvestingPro identifies as low relative to near-term earnings growth. For deeper insights into Sabra’s financial health and comprehensive analysis, investors can access the Pro Research Report, available for this and over 1,400 other US equities.
In other recent news, Sabra Healthcare REIT Inc. announced its third-quarter 2025 earnings, revealing a notable discrepancy between expected and actual earnings per share (EPS). The company reported an EPS of $0.09, which was significantly below the anticipated $0.18, resulting in a 50% negative surprise. Despite this earnings miss, Sabra Healthcare’s revenue slightly exceeded expectations, reaching $190.04 million compared to the forecasted $187.06 million, a 1.59% positive variance. These developments highlight the mixed financial performance for the quarter. Analyst reactions to these earnings results have yet to be detailed, but the figures indicate areas of concern for investors. This recent performance may prompt further analysis by financial experts to understand the implications for Sabra Healthcare’s future.
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