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Saturday, December 15, 2007 1:43:37 PM
CSH.un
From RBC:
Chartwell Seniors Housing REIT (CSH.UN) – Now In Value Territory - Increasing Rating To "Outperform"
Outperform, Above Average Risk, Price Target $13.00
RBC Capital Markets is adjusting its rating to Outperform on Chartwell units given the total return potential of 37% to the revised
12-month target of $13.00. Chartwell's units have been in a declining trend for most of the year. The valuation achieved earlier
in the year was clearly the product of takeover speculation. However, the current unit price has been excessively depressed.
The situation likely exists due to considerable year-end tax loss selling as the units are now at their lowest price in 4 years and.
Chartwell is currently over-distributing, as the current distribution of $1.07 represents a payout ratio of 124% to the 2008E AFFO
of $0.86 at RC Capital Markets. However, a cash position of $118MM and a debt to gross book value of 54% suggests that
Chartwell possesses ample financial flexibility such that a distribution cut is not imminent. As North America's 3rd largest seniors
housing owner/manager with $2.6B of assets, Chartwell has critical mass and scale and the Analyst believes there are a
number of levers the REIT can pull in order to increase its ROE and enhance distribution coverage.
From RBC:
Chartwell Seniors Housing REIT (CSH.UN) – Now In Value Territory - Increasing Rating To "Outperform"
Outperform, Above Average Risk, Price Target $13.00
RBC Capital Markets is adjusting its rating to Outperform on Chartwell units given the total return potential of 37% to the revised
12-month target of $13.00. Chartwell's units have been in a declining trend for most of the year. The valuation achieved earlier
in the year was clearly the product of takeover speculation. However, the current unit price has been excessively depressed.
The situation likely exists due to considerable year-end tax loss selling as the units are now at their lowest price in 4 years and.
Chartwell is currently over-distributing, as the current distribution of $1.07 represents a payout ratio of 124% to the 2008E AFFO
of $0.86 at RC Capital Markets. However, a cash position of $118MM and a debt to gross book value of 54% suggests that
Chartwell possesses ample financial flexibility such that a distribution cut is not imminent. As North America's 3rd largest seniors
housing owner/manager with $2.6B of assets, Chartwell has critical mass and scale and the Analyst believes there are a
number of levers the REIT can pull in order to increase its ROE and enhance distribution coverage.
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