Introduction:
In a recent move, Wells Fargo initiated coverage of EPR Properties (NYSE:EPR) on September 21, 2023, with an “Underweight” recommendation, according to reports by Fintel. This decision has sparked interest in the investment community, with analysts offering insights and projections for the company’s future.
Price Forecast and Recommendations:
As of August 31, 2023, the average one-year price target for EPR Properties stands at $50.15, with forecasts ranging from a low of $45.45 to a high of $56.70. This average price target suggests a potential increase of 17.28% from EPR’s latest closing price of $42.76. It’s important to note that this projection is not without its challenges, as the company is anticipated to experience a 16.47% decrease in projected annual revenue. The estimated annual non-GAAP EPS is $2.55.
Dividend Declaration:
EPR Properties declared a regular monthly dividend of $0.28 per share ($3.30 annualized) on August 15, 2023. Shareholders of record as of August 31, 2023, received this payment on September 15, 2023. The stock’s current dividend yield, based on its share price of $42.76, is 7.72%. To put this in perspective, a historical analysis over the past five years, with weekly samples, indicates an average dividend yield of 7.13%, with a low of 5.67% and a high of 26.39%. The standard deviation of yields is 2.60 (n=176). At present, the current dividend yield is 0.23 standard deviations above this historical average.
Furthermore, the company’s dividend payout ratio is 1.51, which reflects how much of the company’s income is paid out in dividends. A payout ratio greater than one suggests that the company is using savings to maintain its dividend, which can be a sign of financial stress.
Fund Sentiment and Shareholder Activity:
As of the most recent data, 660 funds or institutions hold positions in EPR Properties. This marks an increase of 7 owners (or 1.07%) in the last quarter. The average portfolio weight dedicated to EPR is 0.17%, showing an increase of 19.26%. However, it’s worth noting that total shares owned by institutions have decreased by 3.23% in the last three months, now totaling 63,268K shares. The put/call ratio for EPR stands at 2.54, indicating a bearish outlook among investors.
Notable Institutional Shareholders:
Invesco holds 5,489K shares, representing 7.29% ownership of the company. In the previous filing, the firm reported owning 5,570K shares, reflecting a decrease of 1.48%. Notably, the firm significantly increased its portfolio allocation in EPR by 1,128.98% over the last quarter.
VGSIX – Vanguard Real Estate Index Fund Investor Shares owns 3,297K shares, equivalent to 4.38% ownership. In its prior filing, the firm reported owning 3,346K shares, marking a decrease of 1.48%. However, it increased its portfolio allocation in EPR by 7.86% over the last quarter.
VTSMX – Vanguard Total Stock Market Index Fund Investor Shares holds 2,352K shares, representing 3.12% ownership. In the previous filing, the firm reported owning 2,345K shares, showing an increase of 0.31%. The firm increased its portfolio allocation in EPR by 13.68% over the last quarter.
IJH – iShares Core S&P Mid-Cap ETF owns 2,284K shares, equivalent to 3.03% ownership. In its prior filing, the firm reported owning 2,314K shares, reflecting a decrease of 1.35%. The firm increased its portfolio allocation in EPR by 16.09% over the last quarter.
NAESX – Vanguard Small-Cap Index Fund Investor Shares holds 1,944K shares, representing 2.58% ownership. In its previous filing, the firm reported owning 1,971K shares, marking a decrease of 1.40%. However, the firm increased its portfolio allocation in EPR by 15.25% over the last quarter.
About EPR Properties:
EPR Properties is a prominent experiential net lease real estate investment trust (REIT) that specializes in select enduring experiential properties within the real estate industry. The company focuses on real estate venues that provide out-of-home leisure and recreation experiences where consumers choose to spend their discretionary time and money. With nearly $6.5 billion in total investments spanning 44 states, EPR Properties adheres to rigorous underwriting and investing criteria centered on key industry, property, and tenant level cash flow standards. The company’s focused approach aims to provide a competitive advantage and the potential for stable and attractive returns.
Conclusion:
Wells Fargo’s “Underweight” recommendation for EPR Properties has stirred interest in the investment community. While the average price target suggests potential upside, challenges lie ahead with projected revenue decreases. Moreover, the company’s dividend yield and payout ratio indicate a need for careful consideration. As institutional sentiment fluctuates and notable shareholders adjust their positions, EPR Properties continues to be a subject of analysis and discussion within the investment landscape.