Healthpeak Properties (DOC): A Fallen Stock with Analysts Betting on a Strong Rebound

Healthpeak Properties (NYSE: DOC), a real estate investment trust (REIT) focused on healthcare and life sciences assets, has faced headwinds in recent years, but analysts are now betting on a turnaround. With a stock price hovering near $18 as of early May . . . the question is: Is DOC a diamond in the rough—or a risky bet in a volatile sector?

The Case for Buying a "Falling" Stock

Healthpeak’s stock has struggled to keep pace with the broader market. Over the past five years, it has returned just 8.34%, lagging far behind the S&P 500’s +100.89% surge. Year-to-date, however, DOC has eked out a +10.28% return, slightly outperforming the index’s +3.31%. While this may seem underwhelming, analysts argue that the REIT’s fundamentals are improving—and the upside potential is compelling.

Analysts See a 32% Upside—But Disagreement Lingers

The analyst consensus for DOC is a "Moderate Buy", with an average price target of $23.42, implying a 31.95% upside from current levels. However, there’s a notable spread in targets:

• Bullish views: Deutsche Bank’s $28.00 target (a +57% upside) and Morgan Stanley’s $25.00 price tag highlight confidence in DOC’s life sciences leasing momentum.
• Bearish cautions: Jefferies and Citigroup have trimmed targets, citing concerns about overvaluation and sector-specific risks.

The Bull Case: Life Sciences and a Rebounding Healthcare Sector

The bullish narrative hinges on two pillars: life sciences leasing and healthcare recovery.

1. Life Sciences Boom: Healthpeak has secured over $500 million in life sciences deal volume this year, with same-store net operating income (SS-NOI) growing by 5.4% in Q1 2025. Analysts at Evercore ISI and Wedbush argue that demand for lab space—from biotech startups to university partnerships—is fueling this growth.

1. CCRC Recovery: Continuing Care Retirement Community (CCRC) occupancy has rebounded to pre-pandemic levels, boosting free cash flow (FFOPs) and adjusted funds from operations (AFFOPs).

2. Balance Sheet Strength: With a conservative debt/EBITDA ratio of 5.1x, Healthpeak is well-positioned to weather economic volatility or rising interest rates.

Risks: Oversupply and Rising Costs

The bear case isn’t to be ignored. Key risks include:

• Life Sciences Oversupply: Competitors are expanding lab space, which could pressure rental rates or occupancy.
• Construction Costs: Rising material and labor expenses could squeeze margins on new developments.
• Analyst Uncertainty: EPS estimates have been revised frequently, reflecting volatility in the sector.

The Numbers: Growth Ahead, But a Bumpy Road in 2025

Analysts project DOC’s earnings per share (EPS) will drop 44.6% in 2025 due to one-time costs and sector headwinds. However, a rebound is expected in 2026 with +35.18% growth. Revenue is forecast to rise steadily, with 5.8% growth in 2025 and 4.59% in 2026.

Conclusion: A Buy for Those Willing to Wait

Healthpeak is a stock for investors who believe in the long-term demand for healthcare and life sciences real estate—and are willing to endure short-term volatility.

• Upside Catalysts: Strong life sciences leasing, CCRC recovery, and disciplined capital allocation could push DOC toward its $23.42 consensus target by year-end.
• Downside Risks: Oversupply in life sciences and margin pressure from construction costs could cap gains.

At its current price, DOC offers a 31.95% potential return based on analyst averages—a compelling reward for a REIT that’s underperformed in recent years. While not without risks, the stock fits the "fallen but rising" profile that analysts increasingly endorse.

Final Take: Buy DOC with a long-term horizon, but keep an eye on leasing activity and cost trends.