LTC Properties Faces Financial Challenges Amid Genesis Healthcare Bankruptcy

LTC Properties faces financial challenges due to Genesis Healthcare's bankruptcy, impacting revenue streams. Analysts provide mixed projections with a slight average upside potential for LTC's stock price. GuruFocus metrics indicate significant downside risk based on fair value estimations.

LTC Properties Inc (LTC) has been significantly impacted by the recent bankruptcy filing of Genesis Healthcare. Genesis, through its affiliates, operates six skilled nursing facilities in New Mexico and Alabama under a master lease agreement with LTC. This lease initially matures on April 30, 2026, with options for three additional five-year renewals. As of June 3, LTC was informed by Genesis of their intention to exercise a five-year extension, potentially extending the lease until April 30, 2031 [1].

Genesis contributes significantly to LTC's financials, accounting for $8.4 million in annualized revenue and $9.5 million in annualized contractual cash revenue. These figures make up 4.5% and 5.1%, respectively, of LTC's totals as of March 31. Importantly, Genesis has fulfilled its rent obligations up to July 2025 [1].

To safeguard its interests, LTC holds a $4.7 million letter of credit as security from Genesis, in accordance with the master lease terms [1].

Wall Street Analysts Forecast
Based on the one-year price targets offered by 7 analysts, the average target price for LTC Properties Inc (LTC, Financial) is $37.00 with a high estimate of $40.00 and a low estimate of $34.00. The average target implies an upside of 4.58% from the current price of $35.38. More detailed estimate data can be found on the LTC Properties Inc (LTC) Forecast page [1].

Based on the consensus recommendation from 8 brokerage firms, LTC Properties Inc's (LTC, Financial) average brokerage recommendation is currently 2.8, indicating "Hold" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell [1].

Based on GuruFocus estimates, the estimated GF Value for LTC Properties Inc (LTC, Financial) in one year is $22.80, suggesting a downside of 35.56% from the current price of $35.38. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the LTC Properties Inc (LTC) Summary page [1].

References
[1] https://www.gurufocus.com/news/2969802/ltc-properties-faces-uncertainty-after-genesis-healthcare-bankruptcy-filing-ltc-stock-news