Senior Housing Properties Trust (SNH) Price Analysis: SNH Needs To Hold Tight Above These Levels

Wall Street’s most bullish Senior Housing Properties Trust (NASDAQ:SNH) analysts are predicting the share price to blow past $17 per share during the next 12 months. The current median share price forecast by them is $13.5, suggesting that the stock could increase 9.22% in that time frame. The average price target of $13.58 calls for a nearly 9.87% increase in the stock price.

Senior Housing Properties Trust (NASDAQ:SNH) dropped -0.08% in recent trade and currently has a stock-market value of $2.9B. The shares finished at $12.36, after trading as low as $12.34 earlier in the session. It hit an intraday high Thursday at $12.5. Trading activity significantly weakened as the volume at ready counter decreased to 1,201,654 shares versus 2,265,655 in average daily trading volume over the past 20 days. So far this year, the volume has averaged about 2,008,774 shares. The stock is now 11.05% above against its bear-market low of $11.13 on December 26, 2018. It has retreated -55.1% since it’s 52-week high of $19.17 reached in August. Now the market price is down -23.28% on the year and up 5.46% YTD.

SNH stock’s 50 day simple moving average (SMA 50) price is $13.03 and its 200-day simple moving average (SMA 200) price is $15.84. The company’s stock currently has a total float of 234.03M shares. Its weekly volatility is hovering around 2.14% and felt 2.68% volatility in price over a month. On the upside, the share price will test short term resistance at around $12.46. On a downside, the stock is likely to find some support, which begins at $12.3. The failure to get near-term support could push it to $12.24.

It had seen a positive analyst call from Wells Fargo, which upgraded the stock from Underperform to Outperform on December 03. Analysts at Jefferies, shed their positive views on November 16 by lowering it fromHold to Underperform. Brokerage firm B. Riley FBR, looks cautious as they stick to prior recommendation of Buy, in a call on November 12. However, they did change the target price from $23 to $21.

When looking at valuations, Senior Housing Properties Trust (SNH) has a cheap P/E of 10.23x as compared to industry average of 32.24x. Moreover, it trades for 31.06 times the next 12 months of expected earnings. Also, it is trading at rather inexpensive levels at just over 0.97x price/book and 2.59x price/sales. Compared to others, Senior Housing Properties Trust is in a different league with regards to profitability, having net margins of 25.7%. To put some perspective around this, the industry’s average net margin is 53.95%. SNH’s ROE is 9%, which is also considerably better than the industry’s ROE of 5.44%.

SNH last reported earnings that receded expectations. The company raked in $0.27 per share, -98.72% change on the same period last year. That was worse than consensus for $0.34. Revenue for the recent quarter stood at $285.22 million, up 2% on last year and below the $287.74 million predicted by analysts. For this quarter, Wall Street analysts forecast revenue in a range of $270.84 million to $288 million, which should be compared with $279.72 million generated last year. EPS is seen in a range of $0.41 to $0.47, against the $0.46 reported a year ago.