Target Healthcare REIT PLC (THRL.L) | Investment Case

1. Company Snapshot

1.a. Company Description

Target Healthcare REIT provide a range of tailored funding solutions to support operators to increase the provision of modern, purpose-built care homes across the UK.

Show Full description

1.b. Last Insights on THRL

Target Healthcare REIT PLC's recent performance was bolstered by a 4% increase in net rental income, as reported in its H2 2024 earnings. This robust growth underscores the company's strategic resilience in the face of market challenges. Furthermore, the REIT's ability to navigate a complex healthcare landscape and capitalize on opportunities has yielded a strong financial performance. The company's focus on delivering high-quality care and its commitment to its stakeholders have contributed to its success.

1.c. Company Highlights

Last Price	96.95
Change Percentage	-0.05%
Open	96.44
Previous Close	97
Market Cap ( Millions)	601
Volume	285161
Year High	107
Year Low	78.1
M A 50	95.27
M A 200	97.11

FCF Yield	6.83%
Dividend Yield	6.11%
ROE	8.61%
Debt / Equity	33.73%
Net Debt / EBIDTA	336.89%
Price To Book	0.84
Price Earnings Ratio	9.88
Price To FCF	14.63
Price To sales	8.25
EV / EBITDA	13.46

2. Transcript Summary

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3. NewsRoom

Target Healthcare REIT PLC (LSE:THRL) Full Year 2025 Earnings Call Highlights: Strong Portfolio ...

Oct -16

Source:

Target Healthcare REIT PLC (LSE:THRL) (H2 2024) Earnings Call Highlights: Strong Rental Income ...

Mar -15

Source:

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Jun -19

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.65%)

6. Segments

Property Investment

Expected Growth: 4.65%

Target Healthcare REIT PLC's 4.65% growth in Property Investment is driven by increasing demand for healthcare properties, strategic acquisitions, and a strong portfolio of high-quality care homes. Additionally, the REIT's focus on long-term leases and rent reviews linked to inflation have contributed to its growth, providing a stable and predictable income stream.

7. Detailed Products

Care Homes

Target Healthcare REIT PLC provides high-quality care homes for elderly people, offering a safe and comfortable living environment with 24/7 care and support.

Retirement Communities

The company offers retirement communities that provide independent living, assisted living, and memory care services, promoting an active and social lifestyle for seniors.

Nursing Homes

Target Healthcare REIT PLC provides nursing homes that offer 24/7 skilled nursing care, rehabilitation services, and palliative care, focusing on individualized care plans.

Dementia Care

The company offers specialized dementia care services, providing a safe and supportive environment for individuals living with dementia, Alzheimer's disease, or other cognitive impairments.

Short-Term Rehabilitation

Target Healthcare REIT PLC provides short-term rehabilitation services, helping individuals recover from illness, injury, or surgery, with the goal of returning home or to a lower level of care.

Respite Care

The company offers respite care services, providing temporary relief for caregivers and giving individuals a break from their caregiving responsibilities.

8. Target Healthcare REIT PLC's Porter Forces

Forces Ranking

Threat Of Substitutes

Target Healthcare REIT PLC operates in a niche market, providing healthcare real estate investment opportunities. While there are substitutes available, the company's focus on healthcare and its expertise in the sector reduce the threat of substitutes.

Bargaining Power Of Customers

Target Healthcare REIT PLC's customers are primarily healthcare providers and operators, who have limited bargaining power due to the specialized nature of the company's services.

Bargaining Power Of Suppliers

The company's suppliers are primarily construction companies and property developers. While they have some bargaining power, the company's scale and expertise in the healthcare sector mitigate this threat.

Threat Of New Entrants

The healthcare real estate market has high barriers to entry, including regulatory hurdles and the need for specialized expertise. This reduces the threat of new entrants.

Intensity Of Rivalry

The healthcare real estate market is competitive, with several established players. However, Target Healthcare REIT PLC's focus on the UK market and its expertise in the sector help to differentiate it from competitors.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	25.90%
Debt Cost	3.95%
Equity Weight	74.10%
Equity Cost	5.93%
WACC	5.42%
Leverage	34.95%

11. Quality Control: Target Healthcare REIT PLC passed 5 out of 9 key points

Strong Liquidity

Low Debt

Strong Interest Coverage

Healthy Cash Flow

Operating Efficiency

Strong Return On Equity

Consistent Revenue Growth

Consistent Operating Cash Flow Growth

Margin Improvement

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Target Healthcare REIT

A-Score: 7.1/10

Value: 5.3

Growth: 5.8

Quality: 7.7

Yield: 8.8

Momentum: 6.5

Volatility: 8.7

1-Year Total Return ->

Assura

A-Score: 6.8/10

Value: 4.8

Growth: 4.0

Quality: 6.7

Yield: 9.4

Momentum: 7.5

Volatility: 8.7

1-Year Total Return ->

PHP

A-Score: 6.2/10

Value: 4.5

Growth: 4.3

Quality: 5.8

Yield: 9.4

Momentum: 3.5

Volatility: 9.7

1-Year Total Return ->

Care Property Invest

A-Score: 5.9/10

Value: 5.4

Growth: 5.4

Quality: 5.8

Yield: 9.4

Momentum: 1.5

Volatility: 8.0

1-Year Total Return ->

Lar España Real Estate

A-Score: 5.7/10

Value: 4.5

Growth: 7.2

Quality: 6.1

Yield: 5.0

Momentum: 5.0

Volatility: 6.3

1-Year Total Return ->

Impact Healthcare REIT

A-Score: 5.2/10

Value: 4.8

Growth: 3.8

Quality: 7.3

Yield: 8.1

Momentum: 4.0

Volatility: 3.3

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

-3.57%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

5.42%

Target Healthcare REIT PLC - GB00BJGTLF51

1. Company Snapshot

1.a. Company Description

Target Healthcare REIT provide a range of tailored funding solutions to support operators to increase the provision of modern, purpose-built care homes across the UK.

1.b. Last Insights on THRL

1.c. Company Highlights

Better Quality

Average Yield

Stable Momentum

Average Growth

Higher Yield

Medium Volatility

Strong Momentum

Earnings Beats

Higher Growth

2. Transcript Summary

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.65%)

6. Segments

Property Investment

Expected Growth: 4.65%

7. Detailed Products

Care Homes

Retirement Communities

Nursing Homes

Dementia Care

Short-Term Rehabilitation

Respite Care

8. Target Healthcare REIT PLC's Porter Forces

Forces Ranking

Threat Of Substitutes

Bargaining Power Of Customers

Bargaining Power Of Suppliers

Threat Of New Entrants

Intensity Of Rivalry

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

11. Quality Control: Target Healthcare REIT PLC passed 5 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

0.97$

Current Price

0.97$

Potential

-0.00%

Expected Cash-Flows

12.e Scoring ^Insights

12.f DCF ^BETA