Global Medical REITNYSE: GMRE

I love the economics of real estate. But a landlord I'm not.

Global Medical REIT (GMRE) has become technically an oversold stock now, which implies exhaustion of the heavy selling pressure on it. This, combined with strong agreement among Wall Street analysts in revising earnings estimates higher, indicates a potential trend reversal for the stock in the near term.

Global Medical REIT owns 185 healthcare facilities leased to physicians and healthcare-related groups. The REIT's tenants appear to be well-managed, with a strong rent coverage ratio. Global Medical's FFO and AFFO performance remains satisfying, with a comfortable dividend coverage ratio for preferred shares.

Global Medical REIT: Nothing Promising After Q4 Results, Still A Hold

Global Medical REIT (GMRE) came out with quarterly funds from operations (FFO) of $0.23 per share, missing the Zacks Consensus Estimate of $0.24 per share. This compares to FFO of $0.24 per share a year ago.

Evaluate the expected performance of Global Medical REIT (GMRE) for the quarter ended December 2023, looking beyond the conventional Wall Street top-and-bottom-line estimates and examining some of its key metrics for better insight.

In Q3, 2023, GMRE delivered an improved performance with the underlying FFO finally breaking the momentum of a constant decline. The key reasons for the growth in FFO per share relative to Q2, 2023 lay in the embedded rent escalators and reduced interest costs stemming from successful property sales. GMRE sold an additional property at a cap rate of 5.3%, which is clearly an indicator of high quality portfolio, where the correct value is not reflected in the books.

Global Medical REIT Inc. has seen a decline in its fixed charge coverage and funds from operations due to interest rate hikes. The preferreds are of course safer than the common shares here and offer 7.7%. We show you why in the preferred realm, these remain expensive.

REITs face structural headwinds from higher costs of financing, which is a critical constituency in the process of how REITs create a value. If the interest rates remain elevated, many REITs will suffer and most likely continue to register a negative performance. Some REIT investors consider favourable supply and demand dynamics, as well as REIT's ability to increase rents via CPI-indexation or embedded escalators, as notable mitigants.