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Ventas, Inc. (VTR - Free Report) has reported first-quarter 2021 normalized funds from operations (FFO) per share of 72 cents, surpassing the Zacks Consensus Estimate of 70 cents. However, the figure declined 26% from the year-ago quarter’s number.
The company generated revenues of $910.3 million in the first quarter, which surpassed the Zacks Consensus Estimate of $906.3 million. However, the top line declined 10.1% year over year.
While growth in office building and other services’ revenues aided the healthcare REIT’s results, a decline in same-store cash net operating income (NOI) at the senior housing operating portfolio (“SHOP”) and the triple-net leased portfolio due to the pandemic’s impacts continue to remain a headwind.
Quarter in Detail
For the first quarter, same-store cash NOI growth for the total property portfolio (1,091 assets) declined 20.2% year over year. Segment-wise, same-store cash NOI for the triple-net leased portfolio declined 12.7% year over year, while the SHOP portfolio plunged 42.5%. Meanwhile, the office portfolio reported a year-over-year rise of 0.5%.
Average same-store SHOP occupancy declined 260 basis points (bps) sequentially to 76.5% in the first quarter. Nonetheless, occupancy was notably better than the mid-point of the company’s guidance of a decline of 250-325 bps.
Moreover, in March, Ventas expanded its life-science portfolio with an investment of $272 million in two life science assets adjacent to the Johns Hopkins Medical Campus.
Balance Sheet Position
Ventas exited first-quarter 2021 with cash and cash equivalents of $169.7 million, down from $413.3 million recorded as of the 2020 end. Further, as of Mar 31, 2021, its net debt to adjusted pro-forma EBITDA ratio was 7.1X.
The company had $2.7 billion of liquidity, consisting of $0.2 billion of cash and cash equivalents, $2.7 billion of available capacity on hand, and $0.2 billion of commercial paper outstanding as of May 5.
Outlook
Ventas expects second-quarter 2021 results to reflect improvement in the SHOP segment, which is being affected by the pandemic. Accordingly, first-quarter 2021 normalized FFO per share is guided at 67-71 cents. The Zacks Consensus Estimate for the same is pegged at 71 cents.
Also, the company expects spot occupancy in its sequential same-store SHOP business (434 assets) to improve 150-250 bps sequentially in the second quarter.
PS Business Parks, Inc. reported first-quarter 2021 core FFO per share of $1.67, in line with the Zacks Consensus Estimate. However, the reported figure decreased 2.9% year over year.
Boston Properties Inc.’s (BXP - Free Report) first-quarter 2021 FFO per share of $1.56 beat the Zacks Consensus Estimate of $1.55. The quarterly figure also surpassed the mid-point of the company’s guidance by a cent, highlighting better-than-projected portfolio performance and higher fee income.
Highwoods Properties, Inc.’s (HIW - Free Report) first-quarter 2021 FFO per share of 91 cents surpassed the Zacks Consensus Estimate of 87 cents. However, FFO per share declined 2.2% from 91 cents recorded in the year-ago period.
Note: Anything related to earnings presented in this write-up represent funds from operations (FFO) — a widely used metric to gauge the performance of REITs.
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Image: Bigstock
Ventas (VTR) Q1 FFO Beats, Senior Housing Occupancy Dips
Ventas, Inc. (VTR - Free Report) has reported first-quarter 2021 normalized funds from operations (FFO) per share of 72 cents, surpassing the Zacks Consensus Estimate of 70 cents. However, the figure declined 26% from the year-ago quarter’s number.
The company generated revenues of $910.3 million in the first quarter, which surpassed the Zacks Consensus Estimate of $906.3 million. However, the top line declined 10.1% year over year.
While growth in office building and other services’ revenues aided the healthcare REIT’s results, a decline in same-store cash net operating income (NOI) at the senior housing operating portfolio (“SHOP”) and the triple-net leased portfolio due to the pandemic’s impacts continue to remain a headwind.
Quarter in Detail
For the first quarter, same-store cash NOI growth for the total property portfolio (1,091 assets) declined 20.2% year over year. Segment-wise, same-store cash NOI for the triple-net leased portfolio declined 12.7% year over year, while the SHOP portfolio plunged 42.5%. Meanwhile, the office portfolio reported a year-over-year rise of 0.5%.
Average same-store SHOP occupancy declined 260 basis points (bps) sequentially to 76.5% in the first quarter. Nonetheless, occupancy was notably better than the mid-point of the company’s guidance of a decline of 250-325 bps.
Moreover, in March, Ventas expanded its life-science portfolio with an investment of $272 million in two life science assets adjacent to the Johns Hopkins Medical Campus.
Balance Sheet Position
Ventas exited first-quarter 2021 with cash and cash equivalents of $169.7 million, down from $413.3 million recorded as of the 2020 end. Further, as of Mar 31, 2021, its net debt to adjusted pro-forma EBITDA ratio was 7.1X.
The company had $2.7 billion of liquidity, consisting of $0.2 billion of cash and cash equivalents, $2.7 billion of available capacity on hand, and $0.2 billion of commercial paper outstanding as of May 5.
Outlook
Ventas expects second-quarter 2021 results to reflect improvement in the SHOP segment, which is being affected by the pandemic. Accordingly, first-quarter 2021 normalized FFO per share is guided at 67-71 cents. The Zacks Consensus Estimate for the same is pegged at 71 cents.
Also, the company expects spot occupancy in its sequential same-store SHOP business (434 assets) to improve 150-250 bps sequentially in the second quarter.
Ventas, Inc. Price, Consensus and EPS Surprise
Ventas, Inc. price-consensus-eps-surprise-chart | Ventas, Inc. Quote
Ventas currently carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other REITs
PS Business Parks, Inc. reported first-quarter 2021 core FFO per share of $1.67, in line with the Zacks Consensus Estimate. However, the reported figure decreased 2.9% year over year.
Boston Properties Inc.’s (BXP - Free Report) first-quarter 2021 FFO per share of $1.56 beat the Zacks Consensus Estimate of $1.55. The quarterly figure also surpassed the mid-point of the company’s guidance by a cent, highlighting better-than-projected portfolio performance and higher fee income.
Highwoods Properties, Inc.’s (HIW - Free Report) first-quarter 2021 FFO per share of 91 cents surpassed the Zacks Consensus Estimate of 87 cents. However, FFO per share declined 2.2% from 91 cents recorded in the year-ago period.
Note: Anything related to earnings presented in this write-up represent funds from operations (FFO) — a widely used metric to gauge the performance of REITs.
+1,500% Growth: One of 2021’s Most Exciting Investment Opportunities
In addition to the stocks you read about above, would you like to see Zacks’ top picks to capitalize on the Internet of Things (IoT)? It is one of the fastest-growing technologies in history, with an estimated 77 billion devices to be connected by 2025. That works out to 127 new devices per second.
Zacks has released a special report to help you capitalize on the Internet of Things’s exponential growth. It reveals 4 under-the-radar stocks that could be some of the most profitable holdings in your portfolio in 2021 and beyond.
Click here to download this report FREE >>