CareTrust REIT downgraded to Market Perform from Outperform at BMO Capital

BMO Capital analyst Juan Sanabria downgraded CareTrust REIT (CTRE) to Market Perform from Outperform with a price target of $32, down from $34. Post the PACS allegations, the firm thinks it is “appropriate to take a breather.” PACS represents a significant 20% of the company’s pro-forma rents and has made up a significant piece of CareTrust’s external growth, the analyst tells investors in a research note. BMO sees potential risk to CareTrust’s PACS rent coverage, particularly new acquisitions, if billing policies change relative to expected underwriting.