BKD - Brookdale Senior Living: Potential False Technical Bullish Breakout In-Play

2024-02-01 07:53:18 ET

Summary

• Brookdale Senior Living's stock has rallied over 18% in the past 2.5 months, outperforming the S&P 500.
• Brookdale's occupancy levels have shown a sequential fall-off, raising concerns about the sustainability of its stock breakout.
• The company has extended its debt maturities but faces challenges with its high debt-to-equity ratio and negative earnings.

Intro

We wrote about Brookdale Senior Living Inc. (BKD) in November of last year after the release of the company's third-quarter earnings report. RevPar growth exceeded 10% in the third quarter with a similar estimate being projected for Q4. Despite the balance sheet concerns that we laid out in that article (which subsequently led us to maintain our Hold rating in the stock), we projected near-term upside in Brookdale due to the clear evidence of a bullish trend....

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