BofA ups target, cites improved outlook
BofA Securities on Thursday raised its 12-month price target for Brookdale Senior Living to $15.50 from $13.00 while keeping a Buy rating on the senior living operator. The stock, trading under the ticker BKD, was changing hands around $13.11 at the time of the report - close to its 52-week high of $13.21 - after delivering a nearly 179% gain over the past year, according to InvestingPro data.
Quarterly preannouncement and guidance
The broker's decision to lift the target followed Brookdale's preannouncement of fourth-quarter results and 2026 guidance in advance of its Investor Day scheduled for January 30. BofA noted that Brookdale's adjusted EBITDA for the fourth quarter was roughly in line with expectations. The company reports last twelve months EBITDA of $460.67 million and carries a market capitalization of about $3.12 billion.
Guidance and credit metrics
BofA highlighted that Brookdale's guidance midpoint for 2026 was roughly 4% above consensus estimates. Management also reiterated a target for core EBITDA growth in the mid-teens and set an objective to reduce leverage to below 6.0x by the end of 2028. Those leverage targets are notable given InvestingPro's identification that Brookdale "operates with a significant debt burden," with total debt of $5.5 billion as of the most recent quarter.
Valuation and multiple expansion
Reflecting its increased conviction in Brookdale's outlook, BofA applied a higher multiple to its forecasts - moving to 15.2x from the prior 14.6x 2026E EBITDAR. InvestingPro reports a current enterprise value to EBITDA multiple of 18.15x and provides a suite of valuation metrics and ProTips in its research notes. BofA's multiple change and higher price target were cited as the primary drivers of the revised valuation.
Operational drivers
The firm frames Brookdale as a pure play on aging demographics with limited exposure to government payors. It expects Brookdale to expand core adjusted EBITDA by about 15% annually over the next several years as the operator improves performance in low-occupancy units and captures operating leverage in facilities with higher occupancy.
Market consensus and fair value commentary
Analyst consensus remains strongly bullish, represented by a 1.5 recommendation score. However, InvestingPro's Fair Value assessment indicates the stock may be trading above intrinsic value after its recent run-up in price, a point the market appears to be weighing against the company's improving operational picture.
Occupancy and peer analyst moves
Brookdale reported a consolidated weighted average occupancy of 82.5% for the fourth quarter of 2025, a 310 basis point improvement year over year. This occupancy uptick aligned with RBC Capital's model expectations; RBC has retained an Outperform rating and a $13.00 price target. Separately, BofA itself upgraded Brookdale from Underperform to Buy and previously set a $13.00 target, citing an improved portfolio profile and positive free cash flow generation.
Following the company's guidance, RBC Capital also raised its price target to $17.00 from $13.00. The company noted November 2025 occupancy rose 300 basis points year over year, despite a slight sequential dip from October. These developments arrive as Brookdale prepares to present more detail at its upcoming Investor Day.
Note on data cited in this article: all valuation, occupancy, debt and EBITDA figures referenced here are drawn from the company preannouncement, broker reports and InvestingPro metrics disclosed in the company's recent market commentary.