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Welltower Inc. (WELL - Free Report) has revised second-quarter 2022 guidance. It now anticipates normalized funds from operations (FFO) in the range of 84-87cents per share, raising the midpoint to 85.50 cents compared with the previous guidance of 82-87cents. The Zacks Consensus Estimate for the same is currently pegged at 86 cents per share.
This move comes on better-than-anticipated Seniors Housing Operating (SHO) fundamentals so far in the quarter.
Concurrent with its business update, WELL also announced the agreement with Calamar to purchase a 25-property senior apartment portfolio for $502 million. The transaction will likely be funded by cash, the assumption of debt and UPREIT operating partnership units. Upon completion of the deal, WELL will significantly expand its market leadership with a total of nearly 10,000 units of Total Wellness Housing Platform.
With acceleration in vaccinations and relaxation in restrictions, senior housing communities have begun to accept residents again, resulting in higher move-in activity and occupancy growth. Per the recent business update, despite rising COVID-19 cases globally during the quarter, from the beginning of the second quarter through Jun 3, 2022, the SHO portfolio spot occupancy witnessed growth of 80 basis points (bps), which was in line with expectations. The REIT’s U.S.,Canada and U.K. portfolios experienced an increase in occupancy of 70 bps, 80 bps and 190 bps, respectively.
Also, with strong renewal rate increases and improving street rates, pricing power remained robust for the period. This is expected to fuel WELL’s rental rate growth in the quarter.
On the development front, the company has announced or completed $750 million of new capital deployment since the release of the first-quarter earnings. From the beginning of the year to Jun 6, the figure stands at $2.8 billion and $8.4 billion since October 2020.
WELL maintains a decent balance-sheet position and ample liquidity of more than $2 billion of combined proceeds from unsettled market shares and expected dispositions and loan payoffs. Its near-term capital deployment comprises approximately $2 billion under contract, including opportunities across all property types and capital structures.
Nevertheless, Welltower faces stiff competition from its peers operating at the national and local levels. Moreover, the company is undertaking portfolio re-positioning and liquidity-enhancing efforts by disposing of its non-performing assets. The dilutive impact on earnings in the near term from asset dispositions could add to concerns.
Some better-ranked stocks from the REIT sector are Prologis (PLD - Free Report) , OUTFRONT Media (OUT - Free Report) and Cedar Realty Trust .
The Zacks Consensus Estimate for Prologis’ 2022 FFO per share has moved 1.8% upward in the past two months to $5.15. PLD presently carries a Zacks Rank of 2 (Buy).
The Zacks Consensus Estimate for OUTFRONT Media’s current-year FFO per share has moved 1.5% northward in the past month to $2.09. OUT also carries a Zacks Rank of 2 at present.
The Zacks Consensus Estimate for Cedar Realty Trust’s ongoing year’s FFO per share has been raised 3.6% over the past month to $2.59. CDR carries a Zacks Rank #2, currently.
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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Welltower (WELL) Revises Q2 FFO Guidance, Adds $502M Property
Welltower Inc. (WELL - Free Report) has revised second-quarter 2022 guidance. It now anticipates normalized funds from operations (FFO) in the range of 84-87cents per share, raising the midpoint to 85.50 cents compared with the previous guidance of 82-87cents. The Zacks Consensus Estimate for the same is currently pegged at 86 cents per share.
This move comes on better-than-anticipated Seniors Housing Operating (SHO) fundamentals so far in the quarter.
Concurrent with its business update, WELL also announced the agreement with Calamar to purchase a 25-property senior apartment portfolio for $502 million. The transaction will likely be funded by cash, the assumption of debt and UPREIT operating partnership units. Upon completion of the deal, WELL will significantly expand its market leadership with a total of nearly 10,000 units of Total Wellness Housing Platform.
With acceleration in vaccinations and relaxation in restrictions, senior housing communities have begun to accept residents again, resulting in higher move-in activity and occupancy growth. Per the recent business update, despite rising COVID-19 cases globally during the quarter, from the beginning of the second quarter through Jun 3, 2022, the SHO portfolio spot occupancy witnessed growth of 80 basis points (bps), which was in line with expectations. The REIT’s U.S.,Canada and U.K. portfolios experienced an increase in occupancy of 70 bps, 80 bps and 190 bps, respectively.
Also, with strong renewal rate increases and improving street rates, pricing power remained robust for the period. This is expected to fuel WELL’s rental rate growth in the quarter.
On the development front, the company has announced or completed $750 million of new capital deployment since the release of the first-quarter earnings. From the beginning of the year to Jun 6, the figure stands at $2.8 billion and $8.4 billion since October 2020.
WELL maintains a decent balance-sheet position and ample liquidity of more than $2 billion of combined proceeds from unsettled market shares and expected dispositions and loan payoffs. Its near-term capital deployment comprises approximately $2 billion under contract, including opportunities across all property types and capital structures.
Nevertheless, Welltower faces stiff competition from its peers operating at the national and local levels. Moreover, the company is undertaking portfolio re-positioning and liquidity-enhancing efforts by disposing of its non-performing assets. The dilutive impact on earnings in the near term from asset dispositions could add to concerns.
Shares of this Zacks Rank #3 (Hold) company have decreased 1.4% over the past three months compared with the industry's decline of 2.9%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Image Source: Zacks Investment Research
Stocks to Consider
Some better-ranked stocks from the REIT sector are Prologis (PLD - Free Report) , OUTFRONT Media (OUT - Free Report) and Cedar Realty Trust .
The Zacks Consensus Estimate for Prologis’ 2022 FFO per share has moved 1.8% upward in the past two months to $5.15. PLD presently carries a Zacks Rank of 2 (Buy).
The Zacks Consensus Estimate for OUTFRONT Media’s current-year FFO per share has moved 1.5% northward in the past month to $2.09. OUT also carries a Zacks Rank of 2 at present.
The Zacks Consensus Estimate for Cedar Realty Trust’s ongoing year’s FFO per share has been raised 3.6% over the past month to $2.59. CDR carries a Zacks Rank #2, currently.
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.