Sabra Healthcare REIT: Balancing Strong FAD Performance with Capital Cost Challenges
Juan C. Sanabria has assigned a Hold rating to Sabra Healthcare REIT, citing mixed performance in its third-quarter 2025 funds available for distribution (FAD) and funds from operations (FFO). While FAD exceeded expectations, FFO fell short. The company maintains a stable outlook with FAD guidance above market predictions, but faces challenges with capital costs reflected in its valuation metrics. Despite strong acquisition activity, these financial constraints may limit growth potential. Sanabria is a 2-star analyst with a 0.5% average return and a 45.73% success rate, covering the Real Estate sector.
Juan C. Sanabria has given his Hold rating due to a combination of factors influencing Sabra Healthcare REIT’s performance. The company’s third-quarter 2025 funds available for distribution (FAD) exceeded market expectations, although its funds from operations (FFO) fell short. Despite this mixed performance, the guidance for FAD was maintained above market predictions, indicating a stable outlook.
However, challenges remain, particularly concerning Sabra’s cost of capital, which is reflected in its valuation metrics such as the 12.4x 2026 estimated AFFO and a 7.7% implied cap rate. While the year-to-date acquisition activity appears robust with a healthy pipeline, these capital cost issues may limit upside potential. Consequently, the Hold rating reflects a balanced view of positive operational performance against financial constraints.
According to TipRanks, C. Sanabria is a 2-star analyst with an average return of 0.5% and a 45.73% success rate. C. Sanabria covers the Real Estate sector, focusing on stocks such as Ventas, Federal Realty, and Brixmor Property.
