布鲁克代尔高级生活（BKD）：开始展现生活在老年海啸浪潮中的意义

USA | Health Care FacilitiesBrookdale Senior Living Starting to Show What It Means to Be Living inthe Senior Tsunami Wave We maintain our positive view on BKD and point to its Q1 performance andguidance raise as solid indicators of the demographics-driven thesis on thename. Occupancy is trending ahead of typical seasonality patterns, which,together with emerging pricing power, should set up BKD for better-than-expected rev and EBITDA/FCF throughout the yr, and we expect continueddemand acceleration (as baby boomers continue to age) to sustain healthygains going forward. Q1 Summary & FY25 Guidance Raise: EBITDA +9.4% vs the Street. •BKD 1Q revs of $813.9MM was slightly below the Street, but showed 4% Y/Y growth, drivenby rate increases and a 140 bps of weighted average occupancy gain.•Adj. EBITDA of $124.139MM was +9.4% above the Street cons of $113.5MM, driven by prudentexpense mgmt and favorability in occupancy.•Q1 weighted average occupancy was 79.3%, +140 bps Y/Y. April weighted average occupancystepped up to 79.8%, +30 bps sequentially.•FY25 Guidance Raised•EBITDA to $440-$450MM vs. prior range of $430-445MM, a $7.5MM increase at themidpt•RevPAR is guided to grow 5.00%-5.75% vs prior guidance of 4.75%-5.75%•Expect to report positive Adjusted Free Cash Flow in the range of $30-$50MM Thesis Review: Aging Boomer Population Driving Improving Performance.Our positive thesison BKD since our initiation last year has been predicated on the view that an aging baby boomerpopulation (i.e., seniors are now getting to the age where more of them are needing to move intoinstitutional care/residential settings) will drive a significant increase in demand for senior housingunits, just as new supply growth remains tempered due to financing and construction costs. Thisthesis is starting to play out, in our view, and we point to BKD's Q1 results as a good indicator of howdemand strength is translating to improved occupancy, pricing power, and margins. As occupancytrends have come in higher than typical seasonality patterns, we expect BKD to outperform investorexpectations throughout the year, even after mgmt's guidance raise post-Q1. As BKD continues torebuild its earnings and cash flow track record, we expect further upside to the stock. Source: Jefferies, Company Data Brian Tanquilut * | Equity Analyst(615) 963-8338 | btanquilut@jefferies.comMeghan Holtz * | Equity Associate+1 (212) 708-2876 | mholtz1@jefferies.comJack Slevin, CFA * | Equity Analyst(212) 284-4686 | jslevin@jefferies.com The Long View: Brookdale Senior Living Investment Thesis / Where We Differ •As the largest operator/owner in the Senior Housing industry, BKD is adistinctive asset that should benefit from powerful tailwinds — acceleratingdemographic growth, coupled with a higher-acuity population and supply/demand imbalance.•We believe BKD's continued portfolio rationalization and lease exit processwill allow the company to improve the quality and durability of its free cashflow post-COVID. Upside Scenario,$10, +47% Base Case,$8, +18% Downside Scenario,$4, -41% •Occupancy growth continues to trend abovepre-COVID levels•Rent growth (+4%-5.0%) above pre-pandemichistorical range•Margins expand from effective expense mgmt,specifically labor and utilities•Improved FCF from recent lease amendments•2025 EBITDA: $449MM; Multiple: ~13x; PT: $8 •Occupancyrecoverycontinuesandthecompanyachieves80%occupancyquickerthan anticipated•Rentgrowthabovepre-pandemichistoricalrange (+5.0-6.0%)•Margins expand more quickly than expected asoccupancy recovers to pre-pandemic levels anddiscipline expense mgmt•Generateincrementalshareholdervalueasimproved operations enhance the underlyingvalue of its real estate assets•2025 EBITDA: $460.0MM; Multiple: 13.5x ; PT:$10 •Occupancy recovery slower than expected andremain below historical levels•Labor costs headwinds dampen margins•Monthly rent growth flattens as competitivepressures remain elevated & BKD loses marketshare•2025 EBITDA: $420.0M; Multiple: 11x ; PT: $4 Sustainability Matters Catalysts Top Material Issue(s): 1) Employee Health and Safety:BKD prioritizes the wellness and safety of itsemployees through the implementation of several programs including the Associate Compassion Fundand the PTO Donation Program.2) Employee Engagement, Diversity & Inclusion:BKD promotes thecareer advancement of diverse candidates through BECOME, its leadership immersion program thatequips participants with key managerial skills. •Realestatemonetization:BKDownssubstantial real estate assets that it could lookto opportunistically monetize over the next fewyears.•Quarterly Earnings Results: BKD shares reactsignificantly to quarterly earnings results andquarterly guidance.•De-leveringthebalancesheet:BKDde-leversdrivenEBITDAexpansionandFCFimprovement Company Target(s): 1)Improve DART (Days Away, Restricted, or Transferred) metrics to outperformcompetitors in the same industry.2)Maintain and improve Net Promoter Score (NPS) at its co