What happened

Shares of Welltower (WELL -0.69%) jumped 10.5% in April, according to data provided by S&P Global Market Intelligence. Analyst upgrades were the primary catalyst driving shares of the healthcare REIT higher last month. 

So what

Several analysts adjusted their ratings and price targets on Welltower last month. Credit Suisse analyst Tayo Okusanya raised their price target on the REIT from $72 to $80 a share, which is marginally below the current stock price. The analyst expects Welltower to deliver improving earnings throughout the year. Okusanya sees the potential for 10%+ annual funds from operation (FFO) per share growth in the 2023-2024 time frame, a healthy rate for a REIT. 

Citi analyst Nicholas Joseph upgraded Welltower stock from neutral to buy last month. The analyst also boosted their price target from $70 to $81 per share. He believes Welltower should benefit from a recovery in occupancy and improving pricing power while its expense pressures should fade. 

Evercore ISI also upgraded Welltower last month. The firm boosted its rating from in line to outperform while keeping an $81 price target. Evercore ISI expects strong earnings growth for the company, driven by "growing evidence of a strong and sustained senior housing recovery." Given its limited near-term debt maturities, the firm believes Welltower has a solid balance sheet to complement its well-leased development pipeline.  

Finally, Wells Fargo analyst Connor Siversky initiated coverage on Welltower stock last month. The analyst gave the stock an overweight rating while setting an $85 price target. Siversky noted that Welltower has a high-quality platform and the best growth potential in the healthcare REIT sector. Because of that, the analyst believes Welltower is an attractive buying opportunity. 

Now what

Welltower has faced a lot of headwinds since the pandemic started due to its impact on demand for senior housing. However, occupancy has steadily improved while cost pressures are coming down. Because of that, the healthcare REIT expects the same-store net operating income from that portfolio to rise sharply this year. 

Meanwhile, the company substantially de-levered its balance sheet through asset and equity sales. That gives it lots of financial flexibility to pursue new investment opportunities as they arise. These factors should drive healthy FFO per share growth in the coming years, providing an additional catalyst for the stock price to continue rising. That makes Welltower an attractive investment opportunity, especially for those seeking to capitalize on senior housing demand's recovery and long-term growth potential.