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Healthpeak (PEAK) to Report Q3 Earnings: What's in the Offing?
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Healthpeak Properties, Inc. is slated to report third-quarter 2021 earnings on Nov 2, after market close. The company’s results are anticipated to reflect year-over-year declines in revenues and funds from operations (FFO) per share.
In the last reported quarter, this healthcare real estate investment trust (REIT) posted FFO as adjusted of 40 cents per share, surpassing the Zacks Consensus Estimate by a whisker. While this outperformance was backed by revenue growth, weakness in the continuing care retirement community (CCRC) portfolio had an adverse impact.
Over the preceding four quarters, the company beat the Zacks Consensus Estimate on all occasions, the average beat being 2.55%. The graph below depicts this surprise history:
Healthpeak Properties, Inc. Price and EPS Surprise
Let’s see how things have shaped up prior to the third-quarter earnings release.
Factors at Play
During third-quarter 2021, vaccine distribution witnessed acceleration. In addition, the pandemic-related restrictions have been relaxed in the recent quarters. The Zacks Consensus Estimate for the quarterly life-science revenues is pegged at $182 million, suggesting sequential growth of 1.7%.
Since the restriction on non-essential visits has been a major bummer for occupancy at the senior housing facilities, the relaxation is likely to have been a breather for healthcare REITs like Healthpeak, Welltower, Inc. (WELL - Free Report) , Ventas (VTR - Free Report) and New Senior Investment Group , which have seniors housing exposures.
As vaccination has gradually brought down the COVID-19 case counts, it led to an occupancy revival in the third quarter. Slowdown in inventory growth also acted as tailwind. Per the NIC-MAP’s senior housing data, amid improving demand, seniors housing occupancy increased to 80.1% during the quarter from the second quarter’s 78.7%.
During the third quarter, annual rent growth expanded 20 basis points sequentially to 1.5% and annual absorption advanced 410 bps to 0.2%. As the situation has improved since the initial pandemic days, Healthpeak is witnessing higher number of move-ins, which is likely to have led to revenue and NOI growth in the quarter under consideration.
Moreover, with the aging demography and increasing life expectancy of the U.S. population continuing to drive demand for life-changing therapies and cures, it is offering scope for scientific innovation and biopharma drug development by biotechs. Amid the global efforts to develop life-saving vaccines and therapeutics for coronavirus, the drug research and innovation business continued to witness a robust demand during the July-September period.
The underlying demand drivers are the strengthening life-science fundamentals, leasing activity and rent growth. Favorable drug approval trends and high life-science funding are other positives. Amid these, with an existing biotech-heavy tenant base, Healthpeak is seeing decent demand and retention at its lab properties.
The company follows a cluster strategy in three premier life-science epicenters — San Diego, San Francisco and Boston — to assemble assets through acquisitions, developments and redevelopments.
Over the past few years, Healthpeak has significantly reduced the size of both senior housing operating portfolio and triple-net portfolios through divestitures to rebalance its portfolio toward life-science and medical office businesses and offer stability to earnings. Though such efforts are strategic fits for the long term, the large-scale dispositions are expected to have reduced the cash flows, and resulted in lost revenues and earnings dilution in third-quarter 2021.
Amid the concerns, the consensus estimate for the third-quarter total revenues is pegged at $476.9 million, suggesting a year-over-year fall of 20.2%.
Prior to the third-quarter earnings release, there is a lack of any solid catalyst for becoming optimistic about the company’s prospects. The Zacks Consensus Estimate for the FFO per share has been revised 2.5% downward to 39 cents in the past month. It also suggests a 2.5% year-over-year decline.
Here is what our quantitative model predicts:
Healthpeak does not have the right combination of two key ingredients — a positive Earnings ESP and Zacks Rank #3 (Hold) or higher — for increasing the odds of a FFO beat.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Earnings ESP: The Earnings ESP for Healthpeak is -0.95%.
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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Healthpeak (PEAK) to Report Q3 Earnings: What's in the Offing?
Healthpeak Properties, Inc. is slated to report third-quarter 2021 earnings on Nov 2, after market close. The company’s results are anticipated to reflect year-over-year declines in revenues and funds from operations (FFO) per share.
In the last reported quarter, this healthcare real estate investment trust (REIT) posted FFO as adjusted of 40 cents per share, surpassing the Zacks Consensus Estimate by a whisker. While this outperformance was backed by revenue growth, weakness in the continuing care retirement community (CCRC) portfolio had an adverse impact.
Over the preceding four quarters, the company beat the Zacks Consensus Estimate on all occasions, the average beat being 2.55%. The graph below depicts this surprise history:
Healthpeak Properties, Inc. Price and EPS Surprise
Healthpeak Properties, Inc. price-eps-surprise | Healthpeak Properties, Inc. Quote
Let’s see how things have shaped up prior to the third-quarter earnings release.
Factors at Play
During third-quarter 2021, vaccine distribution witnessed acceleration. In addition, the pandemic-related restrictions have been relaxed in the recent quarters. The Zacks Consensus Estimate for the quarterly life-science revenues is pegged at $182 million, suggesting sequential growth of 1.7%.
Since the restriction on non-essential visits has been a major bummer for occupancy at the senior housing facilities, the relaxation is likely to have been a breather for healthcare REITs like Healthpeak, Welltower, Inc. (WELL - Free Report) , Ventas (VTR - Free Report) and New Senior Investment Group , which have seniors housing exposures.
As vaccination has gradually brought down the COVID-19 case counts, it led to an occupancy revival in the third quarter. Slowdown in inventory growth also acted as tailwind. Per the NIC-MAP’s senior housing data, amid improving demand, seniors housing occupancy increased to 80.1% during the quarter from the second quarter’s 78.7%.
During the third quarter, annual rent growth expanded 20 basis points sequentially to 1.5% and annual absorption advanced 410 bps to 0.2%. As the situation has improved since the initial pandemic days, Healthpeak is witnessing higher number of move-ins, which is likely to have led to revenue and NOI growth in the quarter under consideration.
Moreover, with the aging demography and increasing life expectancy of the U.S. population continuing to drive demand for life-changing therapies and cures, it is offering scope for scientific innovation and biopharma drug development by biotechs. Amid the global efforts to develop life-saving vaccines and therapeutics for coronavirus, the drug research and innovation business continued to witness a robust demand during the July-September period.
The underlying demand drivers are the strengthening life-science fundamentals, leasing activity and rent growth. Favorable drug approval trends and high life-science funding are other positives. Amid these, with an existing biotech-heavy tenant base, Healthpeak is seeing decent demand and retention at its lab properties.
The company follows a cluster strategy in three premier life-science epicenters — San Diego, San Francisco and Boston — to assemble assets through acquisitions, developments and redevelopments.
Over the past few years, Healthpeak has significantly reduced the size of both senior housing operating portfolio and triple-net portfolios through divestitures to rebalance its portfolio toward life-science and medical office businesses and offer stability to earnings. Though such efforts are strategic fits for the long term, the large-scale dispositions are expected to have reduced the cash flows, and resulted in lost revenues and earnings dilution in third-quarter 2021.
Amid the concerns, the consensus estimate for the third-quarter total revenues is pegged at $476.9 million, suggesting a year-over-year fall of 20.2%.
Prior to the third-quarter earnings release, there is a lack of any solid catalyst for becoming optimistic about the company’s prospects. The Zacks Consensus Estimate for the FFO per share has been revised 2.5% downward to 39 cents in the past month. It also suggests a 2.5% year-over-year decline.
Here is what our quantitative model predicts:
Healthpeak does not have the right combination of two key ingredients — a positive Earnings ESP and Zacks Rank #3 (Hold) or higher — for increasing the odds of a FFO beat.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Earnings ESP: The Earnings ESP for Healthpeak is -0.95%.
Zacks Rank: It currently carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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.