CareTrust REIT: Analyst Maintains Hold Rating Amid Underperformance and Conservative Guidance.

BMO Capital analyst Juan C. Sanabria maintains a Hold rating on CareTrust REIT with a $35.00 price target. The rating is based on the company's underperformance, conservative guidance, and missed expectations for normalized Funds from Operations (FFO) and Funds Available for Distribution (FAD) per share. Despite positive developments in the Skilled Nursing Facility sector, the guidance for 2025 FAD remains below consensus estimates and does not factor in potential future acquisitions.

CareTrust REIT (NYSE: CTRE) reported its Q2 2025 earnings, with mixed results that included a miss on normalized Funds from Operations (FFO) and Funds Available for Distribution (FAD) per share. The company's Q2 EPS was $0.35, beating analyst expectations of $0.34, while its net income of $68.5 million surpassed estimates of $61.7 million. However, the normalized FFO of $0.43 per share missed expectations by $0.02, and the normalized FAD of $0.43 per share also fell short of estimates by $0.02 [1].

Despite the missed FFO and FAD estimates, CareTrust REIT's strategic expansion into the UK market has been a significant driver of growth. The company's $840.5 million acquisition of Care REIT plc added 132 care homes with 20.2-year triple-net leases, boosting annualized rental revenue by $68.6 million and improving EBITDARM coverage to 2.2x [2]. The UK deal is expected to be 9.4% accretive to FFO and 5.7% accretive to FAD, with the company projecting 2025 normalized FFO and FAD of $1.77–$1.79 per share [2].

BMO Capital analyst Juan C. Sanabria maintains a Hold rating on CareTrust REIT with a $35.00 price target, citing the company's underperformance, conservative guidance, and missed expectations for normalized FFO and FAD per share. Sanabria noted that the 2025 guidance for FAD remains below consensus estimates and does not factor in potential future acquisitions [3].

CareTrust REIT's strategic acquisitions, including the UK deal, have significantly enhanced its financial flexibility. The company upsized its credit facility with a $500 million term loan, improving its financial flexibility and supporting its $600 million investment pipeline [1]. The company's disciplined capital structure, with $65 million in cash and no debt maturities until 2028, positions it well to fund its growth initiatives.

In conclusion, while CareTrust REIT's Q2 2025 earnings missed analyst expectations for FFO and FAD per share, the company's strategic expansion into the UK market and disciplined capital deployment demonstrate a strong commitment to long-term growth. Investors should closely monitor the company's execution of its expansion plans and future earnings reports to assess its potential for sustained outperformance.

References:
[1] https://www.tradingview.com/news/reuters.com,2025:newsml_PLXA9D4BA:0-caretrust-reit-q2-net-income-beats-expectations/
[2] https://www.ainvest.com/news/caretrust-reit-q2-2025-earnings-uk-expansion-blueprint-sustained-growth-healthcare-real-estate-2508/
[3] https://seekingalpha.com/news/4480408-caretrust-reit-ffo-of-0_43-misses-by-0_02-revenue-of-112_47m-beats-by-10_45m