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Welltower (WELL) Poised for a Recovery This Earnings Season?
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Welltower, Inc. (WELL - Free Report) is scheduled to report second-quarter 2021 results on Jul 29, after market close. The company’s results are expected to reflect year-over-year declines in quarterly revenues and funds from operations (FFO) per share.
In the last reported quarter, this Toledo, OH-based healthcare real estate investment trust (REIT) delivered a surprise of 6.67% with respect to the normalized FFO per share.
Over the preceding four quarters, Welltower beat the Zacks Consensus Estimate on all occasions, the average surprise being 5.77%. The graph below depicts this surprise history:
Let’s see how things have shaped up prior to the second-quarter earnings release.
Factors to Consider
Going by its business update, Welltower seniors housing operating (“SHO”) portfolio is seeing a recovery in occupancy. Since the beginning of the second quarter through Jun 18, 2021, the SHO portfolio occupancy expanded 140 basis points (bps), surpassing the company’s initial guidance of around a 130-basis point gain for the full second quarter. Moreover, total portfolio occupancy advanced 180 bps from the pandemic-induced low seen on Mar 12, 2021.
Since the beginning of the second quarter through Jun 18, 2021, the company’s U.S. and U.K. SHO portfolios reported occupancy gain of roughly 210 bps and 170 bps, respectively. In addition, though the Canada SHO portfolio saw an occupancy contraction of 50 bps through the first two months of the second quarter, it was flat, month to date, through Jun 18.
The return of many communities to pre-COVID conditions aided this performance, with move-in activity being solid through June. Further, Welltower is expected to have received a total of $838 million in pro rata disposition proceeds through Jun 30, 2021.
The Zacks Consensus Estimate for second-quarter resident fees and services is pegged at $726 million, indicating an increase from the $723 million reported in the prior quarter. The consensus estimate for revenues from the SHO portfolio is pinned at $734 million, calling for a 3.2% increase, quarter on quarter. Revenues from the Seniors Housing Triple Net portfolio are expected to be $152 million, up from the prior quarter’s $65 million.
Total revenues for the second quarter are pegged at $1.10 billion, suggesting a fall of 7.1% from the prior-year reported number.
Prior to the second-quarter earnings release, the Zacks Consensus Estimate for the second-quarter FFO per share has been revised marginally upward to 77 cents over the past month, indicating bullish analyst sentiment. However, it calls for a decline of 10.5% from the year-earlier reported figure.
What Our Quantitative Model Says:
Our proven model predicts a surprise in terms of FFO per share for Welltower this season. The combination of a positive Earnings ESP, and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold), increases the chances of a FFO beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Welltower currently carries a Zacks Rank of 2 and has an Earnings ESP of +1.36%.
Other Stocks That Warrant a Look
Here are a few other stocks in the REIT sector that you may want to consider, as our model shows that these too have the right combination of elements to report a surprise this quarter:
Digital Realty Trust, Inc. (DLR - Free Report) , scheduled to report quarterly numbers on Jul 29, currently has an Earnings ESP of +0.63% and carries a Zacks Rank of 3.
Public Storage (PSA - Free Report) , slated to announce second-quarter results on Aug 3, currently has an Earnings ESP of +0.89% and carries a Zacks Rank of 3.
Note: Anything related to earnings presented in this write-up represents funds from operations (FFO) — a widely used metric to gauge the performance of REITs.
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Welltower (WELL) Poised for a Recovery This Earnings Season?
Welltower, Inc. (WELL - Free Report) is scheduled to report second-quarter 2021 results on Jul 29, after market close. The company’s results are expected to reflect year-over-year declines in quarterly revenues and funds from operations (FFO) per share.
In the last reported quarter, this Toledo, OH-based healthcare real estate investment trust (REIT) delivered a surprise of 6.67% with respect to the normalized FFO per share.
Over the preceding four quarters, Welltower beat the Zacks Consensus Estimate on all occasions, the average surprise being 5.77%. The graph below depicts this surprise history:
Welltower Inc. Price and EPS Surprise
Welltower Inc. price-eps-surprise | Welltower Inc. Quote
Let’s see how things have shaped up prior to the second-quarter earnings release.
Factors to Consider
Going by its business update, Welltower seniors housing operating (“SHO”) portfolio is seeing a recovery in occupancy. Since the beginning of the second quarter through Jun 18, 2021, the SHO portfolio occupancy expanded 140 basis points (bps), surpassing the company’s initial guidance of around a 130-basis point gain for the full second quarter. Moreover, total portfolio occupancy advanced 180 bps from the pandemic-induced low seen on Mar 12, 2021.
Since the beginning of the second quarter through Jun 18, 2021, the company’s U.S. and U.K. SHO portfolios reported occupancy gain of roughly 210 bps and 170 bps, respectively. In addition, though the Canada SHO portfolio saw an occupancy contraction of 50 bps through the first two months of the second quarter, it was flat, month to date, through Jun 18.
The return of many communities to pre-COVID conditions aided this performance, with move-in activity being solid through June. Further, Welltower is expected to have received a total of $838 million in pro rata disposition proceeds through Jun 30, 2021.
The Zacks Consensus Estimate for second-quarter resident fees and services is pegged at $726 million, indicating an increase from the $723 million reported in the prior quarter. The consensus estimate for revenues from the SHO portfolio is pinned at $734 million, calling for a 3.2% increase, quarter on quarter. Revenues from the Seniors Housing Triple Net portfolio are expected to be $152 million, up from the prior quarter’s $65 million.
Total revenues for the second quarter are pegged at $1.10 billion, suggesting a fall of 7.1% from the prior-year reported number.
Prior to the second-quarter earnings release, the Zacks Consensus Estimate for the second-quarter FFO per share has been revised marginally upward to 77 cents over the past month, indicating bullish analyst sentiment. However, it calls for a decline of 10.5% from the year-earlier reported figure.
What Our Quantitative Model Says:
Our proven model predicts a surprise in terms of FFO per share for Welltower this season. The combination of a positive Earnings ESP, and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold), increases the chances of a FFO beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Welltower currently carries a Zacks Rank of 2 and has an Earnings ESP of +1.36%.
Other Stocks That Warrant a Look
Here are a few other stocks in the REIT sector that you may want to consider, as our model shows that these too have the right combination of elements to report a surprise this quarter:
American Tower Corporation (AMT - Free Report) , slated to release second-quarter earnings on Jul 29, has an Earnings ESP of +1.67% and carries a Zacks Rank of 3, at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Digital Realty Trust, Inc. (DLR - Free Report) , scheduled to report quarterly numbers on Jul 29, currently has an Earnings ESP of +0.63% and carries a Zacks Rank of 3.
Public Storage (PSA - Free Report) , slated to announce second-quarter results on Aug 3, currently has an Earnings ESP of +0.89% and carries a Zacks Rank of 3.
Note: Anything related to earnings presented in this write-up represents funds from operations (FFO) — a widely used metric to gauge the performance of REITs.