We have changed our long-term recommendation for Ventas (VTR) to Outperform driven by its strong third quarter 2011 results. Recurring FFO for the reported quarter exceeded the Zacks Consensus Estimate by $0.06 primarily due to the accretive effect of the acquisitions of Nationwide Health Properties and Atria.
Ventas is one of the largest healthcare REITs in the U.S., with one of the most diversified portfolios and exposure to nearly all types of facilities. The healthcare sector is relatively immune to the downturn in the economy, and provides a steady source of income that insulates the company from short-term market volatility.
Our target price is $66.00, implying a multiple of 19.9X 2011 FFO/share.
