American Healthcare REIT price target raised to $37 from $30 at Citi

Citi maintained its Neutral rating on American Healthcare REIT (AHR) but raised its price target to $37 from $30, citing continued demand tailwinds, limited new supply, and positive demographic trends in the healthcare property sector. The firm also increased its 2025 and 2026 FFO estimates and noted AHR's strong Q1 2025 financial performance, including a 26% increase in normalized FFO per share and revenue of $540.6 million. KeyBanc and JMP Securities have also raised their price targets to $40, reflecting confidence in AHR's growth prospects, further supported by strategic moves like equity issuance and asset acquisitions.

Analysis

Citigroup maintained its Neutral rating on American Healthcare REIT, Inc. (AHR) while substantially increasing its price target to $37.00 from $30.00, reflecting a more optimistic outlook despite the unchanged rating. This revision is supported by an increase in Citi's 2025 funds from operations (FFO) estimate for AHR to $1.63 per share (from $1.58) and its 2026 FFO projection to $1.83 (from $1.79). The new price target corresponds to approximately 24 times Citi's 2026 adjusted FFO (AFFO) estimate. AHR's stock, trading at $35.40, is near its 52-week high of $36.33 and has demonstrated a remarkable 151% return over the past year. Key drivers for the upgraded valuation include sustained demand tailwinds in the healthcare property sector, limited new supply, and positive demographic trends. American Healthcare REIT reported strong Q1 2025 financial performance, with revenue reaching $540.6 million and a 26% year-over-year increase in normalized FFO (NFFO) per share, although earnings per share were negative at -$0.04. The company's Trilogy portfolio was a notable contributor to this performance. Aligning with a positive sentiment, KeyBanc (Overweight rating) and JMP Securities (Market Outperform rating) have also raised their price targets for AHR to $40.00. Furthermore, AHR has revised its full-year 2025 Core FFO per share guidance upward and has engaged in strategic activities such as equity issuance for debt reduction and new asset acquisitions, which are viewed as favorable for future growth.

Key Decisions for Investors

• Investors should weigh the substantial 151% year-over-year stock appreciation and proximity to its 52-week high against the positive fundamental drivers, such as strong Q1 NFFO growth and upwardly revised FFO guidance, to assess if future growth is adequately priced in.
• Despite Citi's Neutral rating, the significant price target increase to $37.00, alongside more bullish $40.00 targets from KeyBanc and JMP Securities, suggests underlying confidence in AHR's prospects; however, the valuation multiple of approximately 24 times 2026 AFFO warrants careful consideration.
• Monitor AHR's ability to sustain FFO growth through continued favorable sector dynamics (demand tailwinds, limited supply), the performance of its Trilogy portfolio, and the successful integration of recent asset acquisitions and strategic capital management.