American Healthcare REIT is set to be a winner in 2026, according to Jefferies. The Wall Street firm named the senior housing stock its top real estate play on the aging population — a theme it expects to outperform next year. The real estate investment trust, which came public in early 2024 at $12 a share, also pays a solid dividend of 2.10%. “AHR stands out as our top pick for ’26 given peer-leading exposure to RIDEA [REIT Investment Diversification and Empowerment Act] senior housing, the 2nd lowest cost of equity, and a growing investment pipeline,” Jefferies analyst Jonathan Petersen wrote in a note earlier this week. “AHR’s ~$9B market cap allows for greater earnings lift from acquisitions vs larger peers, and we see external growth as driving upside to estimates,” he added. Petersen has a $57 price target on American Healthcare REIT, implying about 20% upside from Thursday’s close. The stock is up nearly 68% year to date. AHR YTD mountain American Healthcare REIT year to date REITs should find a better operating environment next year if the Federal Reserve cuts rates, Peterson noted. And their dividends will look more attractive to investors as money market and bond yields fall, which also allows the companies to finance, and refinance, at a lower cost of capital. But since substantial rate cuts aren’t a sure thing, Petersen recommends sticking with durable earnings growth themes that don’t require Fed help. That includes playing an aging population. Demographic growth Those aged 65 and older made up about 17% of the U.S. population in 2020, according to the Census Bureau . They are expected to represent 21% of the population by 2030 — and the percentage will keep climbing through 2060. Next year, the first wave of baby boomers, born in 1946, will turn 80. Senior housing, in particular, should benefit from accelerating growth in the 80+ population, Petersen said. That cohort is projected to grow at a 5% compound annual growth rate through 2030, well above the 1.4% CAGR seen from 2010 through 2024, he noted. Meanwhile, construction relative to inventory is just 2.3%, the lowest level since the third quarter of 2011, Petersen said. He’s forecasting national occupancy could exceed 100% by the end of 2028, “creating meaningful pricing power for incumbents.” Welltower and Ventas should also benefit from the trend, Petersen said. He rates both stocks a buy. His price target of $231 on Welltower suggests 23% upside from Thursday’s close, while his target of $93 on Ventas implies the stock can move 16% higher over the coming year, and that excludes the dividend income.
