What happened
Shares of Brookdale Senior Living(NYSE: BKD) were up 22.8% for the week as of Friday morning and were up as much as 24.9% this week, according to data provided by S&P Global Market Intelligence. The healthcare stock closed at $2.41 last week, then climbed as high as $3.05 a share on Thursday. Brookdale is the country's largest retirement home operator and owns 673 properties in 41 states.
So what
A couple of factors drove the stock's price up. One, the stock hit its 52-week low at $2.27 on March 24 and investors, seeing a bargain, jumped in this week. It also helped that Barclays analyst Steven Valiquette gave the stock a buy rating on Wednesday with a price target of $7. The stock is down more than 59% over the past 12 months, but up more than 9% so far in 2023.
Now what
Senior living facilities were hit hard during the pandemic by added costs, labor shortages, and declining occupancy rates. However, in the long run, the aging population means the need for such facilities is only going to rise. According to U.S. Census estimates, by 2034, the number of those 65 and older will reach 77 million, greater than the number of those under 18 (76.5 million).
The company, like others, struggled during the pandemic, but is coming off a relatively strong fourth-quarter and annual earnings report in February. Brookdale's facilities reported an occupancy rate of 77% in 2022, up from 73.6% a year ago. The company reported 2022 revenue of $2.82 billion, up 2.4%. Brookdale also cut its losses considerably, to $42.6 million, compared to a loss of $216.9 million a year ago. The company said it also grew annual revenue per available room by 10.1%.
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Jim Halley has no position in any of the stocks mentioned. The Motley Fool recommends Barclays Plc. The Motley Fool has a disclosure policy.
