Global Medical REIT Misses Q2 Earnings Expectations

Global Medical REIT Inc. (GMRE) reported weaker than expected Q2 results due to higher expenses, as the company continued to grow its property portfolio.

Shares of the net-lease medical office real estate investment trust (REIT) have gained 24.6% over the past year.

The company reported earnings of $0.04 per share, a cent short of analysts’ expectations. The company reported earnings of under $0.01 per share in the prior-year period.

Funds from Operations (FFO) increased to $0.22 per share compared to $0.19 in the prior-year quarter. Adjusted FFO also grew to $0.23 per share compared to $0.21 reported a year ago.

Total revenues jumped 28.2% year-over-year to $28.2 billion. The increase in revenues reflected a 28% increase in rental revenues, aided by the acquisitions made. (See Global Medical REIT stock charts on TipRanks)

The company completed seven acquisitions during the quarter, totaling $71 million, implying a weighted average cap rate of 7.2%.

The company said that it achieved portfolio occupancy of 99.1% during the quarter, and a rent coverage ratio of 4.4x.

GMRE CEO Jeffrey M. Busch commented, “Though the market remains competitive, we remain confident in our ability to source and acquire high quality medical facilities at attractive yields.”

Busch further added, “We look forward to the balance of the year with confidence as we continue to grow cash flow and create value for our stockholders.”

Following the Q2 results, BMO Capital analyst Juan C. Sanabria reiterated a Buy rating on the stock with a price target of $16 (5.8% upside potential).

Consensus among analysts is a Strong Buy based on four unanimous Buys. The average Global Medical REIT price target of $17.25 implies 14.1% upside potential to current levels.

GMRE scores a 9 out of 10 on TipRanks’ Smart Score rating system, indicating that the stock has strong potential to outperform market expectations.