Ahead Of The Bell: HCP Inc. Lowered To 'Neutral'

NEW YORK (AP) — A Robert W. Baird analyst downgraded health-care REIT HCP Inc. Wednesday, saying shares of the real estate investment trust are trading at a fair price.

David AuBuchon reduced his rating to "Neutral" from "Overweight." AuBuchon holds a price target of $27 on HCP shares, which closed at $29.26 on Tuesday and last closed under $27 on Sept. 4.

The analyst said HCP could continue to report growth from its laboratory and medical-office properties, but he thinks health-care REITs will come under pressure next year as states wrestle with their budgets. Any cuts could lead to lower Medicare/Medicaid reimbursement levels.

AuBuchon also said that the "near-term outlook for senior housing is still uncertain and a recovery may take longer than anticipated due to weak housing and wealth loss from equity markets."