UPDATE: JMP Securities Reiterates On Brookdale Senior Living Following ESC Merger Closing

In a report published Tuesday, JMP Securities analyst Peter L. Martin reiterated a Market Outperform rating on Brookdale Senior Living (NYSE: BKD), and raised the price target from $40.00 to $46.00.

In the report, JMP Securities noted, “We reiterate our Market Outperform rating on Brookdale Senior Living and raise our price target to $46 from $40 based on 12.5x Adj. EV/2015 EBITDAR (unchanged) plus current merger synergy expectations, discounted at 10%, following our 10Q review. With the ESC merger closed, we are updating our 2014-2016 estimates to $2.58, $2.96, and $3.30 versus our previous BKD standalone 2014-2016 estimates of $2.73, $2.97, and $2.94, respectively.

"We are very comfortable that BKD can achieve its year three $0.50 CFFOPS accretion guidance and we currently forecast $0.58 on better than expected operating results. We estimate that every $1.75mm in either cost savings or incremental profitability results in $0.01 CFFOPS. We believe the current weakness in the stock is more related to a shareholder position shift post-merger vs. industry fundamental deterioration, which presents a great long-term buying opportunity, in our opinion. Our $46 price target offers 37.3% upside from current levels.”

Brookdale Senior Living closed on Monday at $33.39.