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Ventas (VTR) Q4 Earnings: What's in Store for the Stock?
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Healthcare real estate investment trust (“REIT”) Ventas, Inc. (VTR - Free Report) is expected to report fourth-quarter and 2016 results on Feb 10, before the market opens. Last quarter, the company delivered a positive surprise of 1.98%.
For the trailing four quarters, Ventas posted an average positive surprise of 1.48%, surpassing estimates on three occasions and posting in-line results in one.
Let’s see how things have shaped up for this announcement.
Rise in interest rate is a concern for Ventas, as the company has substantial exposure to long-term leased assets. Hike in rates is likely to raise the cost of debt, which in turn is expected to adversely affect the profitability of the company.
Also, the company operates in a cut-throat market and competes with national and local healthcare operators. This significantly limits its power to drive its top line as well as crack deals at attractive rates.
Nevertheless, Ventas is focusing on quality acquisitions to boost its position in the healthcare REIT industry. Also, the company has a large and diversified portfolio in the healthcare sector with exposure to all types of facilities. This allows it to capitalize on a wide range of opportunities.
Overall, Ventas’ performance during the quarter was inadequate to win analysts’ confidence. As a result, the Zacks Consensus Estimate for fourth-quarter 2016 remained unchanged over the last seven days.
Earnings Whispers
Our proven model does not conclusively show that Ventas will beat on earnings this season. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), #2 (Buy) or #3 (Hold) for this to happen. However, that is not the case here as you will see below.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks ESP: Both the Most Accurate estimate and the Zacks Consensus Estimate currently stand at $1.03, which translates into an Earnings ESP of 0.00%.
Zacks Rank: Ventas has a Zacks Rank #4 (Sell).
As it is we caution against stocks with Zacks Rank #4 or 5 (Sell-rated) going into earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks to Consider
Here are some REITs that you may want to consider as our model shows that they have the right combination of elements to post an earnings beat this quarter:
CubeSmart (CUBE - Free Report) , expected to release earnings results on Feb 16, has an Earnings ESP of +2.70% and a Zacks Rank #3.
STAG Industrial, Inc. (STAG - Free Report) , expected to release earnings results on Feb 16, has an Earnings ESP of +2.50% and a Zacks Rank #3.
Note: All EPS numbers presented in this write up represent funds from operations (FFO) per share. FFO, a widely used metric to gauge the performance of REITs, is obtained after adding depreciation and amortization and other non-cash expenses to net income.
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Ventas (VTR) Q4 Earnings: What's in Store for the Stock?
Healthcare real estate investment trust (“REIT”) Ventas, Inc. (VTR - Free Report) is expected to report fourth-quarter and 2016 results on Feb 10, before the market opens. Last quarter, the company delivered a positive surprise of 1.98%.
For the trailing four quarters, Ventas posted an average positive surprise of 1.48%, surpassing estimates on three occasions and posting in-line results in one.
Let’s see how things have shaped up for this announcement.
Ventas, Inc. Price and EPS Surprise
Ventas, Inc. Price and EPS Surprise | Ventas, Inc. Quote
Factors to Consider
Rise in interest rate is a concern for Ventas, as the company has substantial exposure to long-term leased assets. Hike in rates is likely to raise the cost of debt, which in turn is expected to adversely affect the profitability of the company.
Also, the company operates in a cut-throat market and competes with national and local healthcare operators. This significantly limits its power to drive its top line as well as crack deals at attractive rates.
Nevertheless, Ventas is focusing on quality acquisitions to boost its position in the healthcare REIT industry. Also, the company has a large and diversified portfolio in the healthcare sector with exposure to all types of facilities. This allows it to capitalize on a wide range of opportunities.
Overall, Ventas’ performance during the quarter was inadequate to win analysts’ confidence. As a result, the Zacks Consensus Estimate for fourth-quarter 2016 remained unchanged over the last seven days.
Earnings Whispers
Our proven model does not conclusively show that Ventas will beat on earnings this season. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), #2 (Buy) or #3 (Hold) for this to happen. However, that is not the case here as you will see below.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks ESP: Both the Most Accurate estimate and the Zacks Consensus Estimate currently stand at $1.03, which translates into an Earnings ESP of 0.00%.
Zacks Rank: Ventas has a Zacks Rank #4 (Sell).
As it is we caution against stocks with Zacks Rank #4 or 5 (Sell-rated) going into earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks to Consider
Here are some REITs that you may want to consider as our model shows that they have the right combination of elements to post an earnings beat this quarter:
CubeSmart (CUBE - Free Report) , expected to release earnings results on Feb 16, has an Earnings ESP of +2.70% and a Zacks Rank #3.
STAG Industrial, Inc. (STAG - Free Report) , expected to release earnings results on Feb 16, has an Earnings ESP of +2.50% and a Zacks Rank #3.
Chesapeake Lodging Trust , expected to release earnings results on Feb 22, has an Earnings ESP of + 2.17% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Note: All EPS numbers presented in this write up represent funds from operations (FFO) per share. FFO, a widely used metric to gauge the performance of REITs, is obtained after adding depreciation and amortization and other non-cash expenses to net income.
Just Released – Driverless Cars: Your Roadmap to Mega-Profits Today
In this latest Special Report, Zacks’ Aggressive Growth Strategist Brian Bolan explores a full-blown technological breakthrough in the making – autonomous cars. He also spotlights 8 stocks with tremendous gain potential to feed off this phenomenon. Click to see the stocks right now >>