Primary Health Properties (LON: PHP) shares closed 1.2% lower on Wednesday despite what analysts described as an encouraging first-quarter trading update, with the stock now down 5.9% year to date and 8% over the past 12 months.
The selloff is seemingly at odds with the tone of analyst commentary, with both Shore Capital and Edison Research remaining firmly constructive on the stock following the update.
Shore Capital highlighted continued rental growth momentum, noting that 199 completed rent reviews in the quarter generated an additional £3 million of income, representing a roughly 6% uplift on previous contracted rents and an annualized increase of 3.4%, ahead of the 3.2% delivered in fiscal 2025.
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The broker also pointed to encouraging progress on deleveraging, with the company advancing both its existing USS joint venture, where £103 million of disposals are under offer, and a new strategic vehicle for its £700 million private hospital portfolio, with four offers under evaluation and expected to conclude by summer 2026.
Shore Capital flagged a prospective dividend yield of 7.8% for fiscal 2026, calling PHP shares “a highly attractive opportunity for investors offering among the best risk-adjusted, total returns profiles in the sector.”
Edison echoed that view, noting that 87% of the £9 million targeted cost synergies from the Assura acquisition have already been delivered, with integration on track to complete by end of June, ahead of schedule.
Edison projects fully covered dividends per share of 7.3 pence for fiscal 2026, representing the 30th consecutive year of dividend growth, and flagged the prospective 7.8% yield as comparing favorably against the 10-year UK gilt yield of 5.0%.
Both firms see the portfolio’s roughly 85% government-backed income base and strong demographic tailwinds as underpinning the investment case.
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