- Global Medical REIT ( NYSE: GMRE ) stock has tanked 8.1% in Thursday morning trading after BMO Capital Markets analyst Juan Sanabria downgraded the medical REIT stock to Market Perform from Outperform on its elevated leverage and floating rate debt exposure and the challenging cost of capital environments.
- "Given higher leverage and lower debt availability, we expect less acquisitions," Sanabria wrote in a note to clients. Instead, he prefers high quality medical office building peers, like Healthcare Realty Trust ( HR ) and Healthpeak ( PEAK ), with lower leverage.
- GMRE's leverage of 7.4x net debt + preferred/EBITDA as of June 30, compared with the sector average of 6.1x, limits external growth options, he said. In addition, the REIT is exposed to rising rates as 39% of its debt is floating due to its revolver.
- See the growth of GMRE Medical REIT's ( GMRE ) long-term debt on its balance sheet over the past 10 years here .
- The Market Perform rating aligns with the Quant rating of Hold and breaks from the average Wall Street rating of Buy.
- SA contributor Dane Bowler takes a bullish view on GMRE Medical REIT ( GMRE ), saying it has a 9% recession-resistant yield
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Global Medical REIT stock drops after BMO downgrades on elevated leverage