Q3 recurring FFO of $0.77 vs. $0.86 tops our $0.75 estimate.
HCN's need-driven assets showed it is holding up in the soft
economy. We see rent coverage levels remaining fairly stable, and
we were encouraged that unit revenue in the independent living,
assisted living, and skilled nursing facilities rose. We look for
HCN to use its strong position and liquidity to continue making
acquisitions. We raise our '09 normalized FFO estimate to $3.12
from $3.07, '10's to $3.19 from $3.09, and our target price to
$45 from $43, on revised price to FFO analysis.
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