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What's in Store for Healthpeak (PEAK) This Earnings Season?
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Healthpeak Properties, Inc. is slated to report second-quarter earnings on Aug 2, after market close. Results are expected to reflect year-over-year growth in quarterly revenues and funds from operations (FFO) per share.
In the last reported quarter, this healthcare real estate investment trust (REIT) posted FFO as adjusted per share of 43 cents, surpassing the Zacks Consensus Estimate by a whisker. It delivered a surprise of 2.38% in terms of FFO as adjusted per share. The performance was backed by solid revenue growth. Same-store portfolio cash (adjusted) net operating income (NOI) witnessed growth due to overall improvement in all its segments, namely life-science, medical office and continuing care retirement communities (CCRC).
In the preceding four quarters, Healthpeak’s earnings beat the Zacks Consensus Estimate on all occasions, the average being 1.88%. The graph below depicts this surprise history:
Healthpeak Properties, Inc. Price and EPS Surprise
The increasing life expectancy of the U.S. population and biopharma drug development growth opportunities have promoted the life-science industry and the related real estate market fundamentals. Further, the drug innovation and development business has continued to experience solid growth due to the need for effective diagnostics, therapies and vaccines, thereby driving the sector fundamentals.
This is expected to have fueled the demand for PEAK’s life-science real-estate portfolio, thus leading to healthy leasing activity and rent growth during the second quarter.
Moreover, PEAK’s CCRC portfolio, which refers to its retirement communities that include independent living, assisted living and skilled nursing units, has been witnessing improvements in the occupancy levels. Per its June Investor Presentation, the May average daily census (ADC) occupancy was 81.1%. This represents a 10 basis points (bps) rise from the March ADC and 120 bps growth from the December 2021 ADC.
Additionally, the healthcare sector is necessity-driven by nature. Senior citizens, who constitute the major customer base of healthcare services, are likely to spend more on healthcare services compared with the average population.
The above-mentioned factors are likely to have aided the second-quarter revenue growth of the CCRC portfolio.
The Zacks Consensus Estimate for second-quarter total revenues is pegged at $505.8 million, indicating a year-over-year rise of 6.2%.
Healthpeak is also expected to have continued with its asset base expansion through acquisitions, developments and redevelopments during the to-be-reported quarter.
The Zacks Consensus Estimate for the FFO per share has been unchanged at 43 cents over the past month. However, on a year-over-year basis, it suggests growth of 7.5%.
What Our Quantitative Model Predicts
Our proven model does not conclusively predict a positive surprise in terms of FFO per share for PEAK this season. The combination of a positive Earnings ESP and a Zacks Rank #3 (Hold) or higher — increases the odds of an FFO beat. However, that’s not the case here.
Earnings ESP: Healthpeak has an Earnings ESP of -2.04%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Here are some stocks that are worth considering from the REIT sector, as our model shows that these have the right combination of elements to deliver a surprise this reporting cycle:
Host Hotels & Resorts (HST - Free Report) is scheduled to report quarterly figures on Aug 3. HST has an Earnings ESP of +9.18% and a Zacks Rank of 2 (Buy) currently.
Public Storage (PSA - Free Report) is slated to report quarterly numbers on Aug 4. PSA has an Earnings ESP of +0.31% and carries a Zacks Rank of 3.
Life Storage is scheduled to report quarterly figures on Aug 3. LSI has an Earnings ESP of +0.09% and a Zacks Rank of 3 presently.
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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What's in Store for Healthpeak (PEAK) This Earnings Season?
Healthpeak Properties, Inc. is slated to report second-quarter earnings on Aug 2, after market close. Results are expected to reflect year-over-year growth in quarterly revenues and funds from operations (FFO) per share.
In the last reported quarter, this healthcare real estate investment trust (REIT) posted FFO as adjusted per share of 43 cents, surpassing the Zacks Consensus Estimate by a whisker. It delivered a surprise of 2.38% in terms of FFO as adjusted per share. The performance was backed by solid revenue growth. Same-store portfolio cash (adjusted) net operating income (NOI) witnessed growth due to overall improvement in all its segments, namely life-science, medical office and continuing care retirement communities (CCRC).
In the preceding four quarters, Healthpeak’s earnings beat the Zacks Consensus Estimate on all occasions, the average being 1.88%. The graph below depicts this surprise history:
Healthpeak Properties, Inc. Price and EPS Surprise
Healthpeak Properties, Inc. price-eps-surprise | Healthpeak Properties, Inc. Quote
Factors at Play
The increasing life expectancy of the U.S. population and biopharma drug development growth opportunities have promoted the life-science industry and the related real estate market fundamentals. Further, the drug innovation and development business has continued to experience solid growth due to the need for effective diagnostics, therapies and vaccines, thereby driving the sector fundamentals.
This is expected to have fueled the demand for PEAK’s life-science real-estate portfolio, thus leading to healthy leasing activity and rent growth during the second quarter.
Moreover, PEAK’s CCRC portfolio, which refers to its retirement communities that include independent living, assisted living and skilled nursing units, has been witnessing improvements in the occupancy levels. Per its June Investor Presentation, the May average daily census (ADC) occupancy was 81.1%. This represents a 10 basis points (bps) rise from the March ADC and 120 bps growth from the December 2021 ADC.
Additionally, the healthcare sector is necessity-driven by nature. Senior citizens, who constitute the major customer base of healthcare services, are likely to spend more on healthcare services compared with the average population.
The above-mentioned factors are likely to have aided the second-quarter revenue growth of the CCRC portfolio.
The Zacks Consensus Estimate for second-quarter total revenues is pegged at $505.8 million, indicating a year-over-year rise of 6.2%.
Healthpeak is also expected to have continued with its asset base expansion through acquisitions, developments and redevelopments during the to-be-reported quarter.
The Zacks Consensus Estimate for the FFO per share has been unchanged at 43 cents over the past month. However, on a year-over-year basis, it suggests growth of 7.5%.
What Our Quantitative Model Predicts
Our proven model does not conclusively predict a positive surprise in terms of FFO per share for PEAK this season. The combination of a positive Earnings ESP and a Zacks Rank #3 (Hold) or higher — increases the odds of an FFO beat. However, that’s not the case here.
Earnings ESP: Healthpeak has an Earnings ESP of -2.04%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Healthpeak currently carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Stocks That Warrant a Look
Here are some stocks that are worth considering from the REIT sector, as our model shows that these have the right combination of elements to deliver a surprise this reporting cycle:
Host Hotels & Resorts (HST - Free Report) is scheduled to report quarterly figures on Aug 3. HST has an Earnings ESP of +9.18% and a Zacks Rank of 2 (Buy) currently.
Public Storage (PSA - Free Report) is slated to report quarterly numbers on Aug 4. PSA has an Earnings ESP of +0.31% and carries a Zacks Rank of 3.
Life Storage is scheduled to report quarterly figures on Aug 3. LSI has an Earnings ESP of +0.09% and a Zacks Rank of 3 presently.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
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.