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What's in the Cards for Healthpeak (PEAK) This Earnings Season?
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Healthpeak Properties, Inc. is slated to report fourth-quarter and full-year 2023 results on Feb 8 after market close. The quarterly results are expected to reflect year-over-year growth 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 per share of 45 cents, beating the Zacks Consensus Estimate by 2.27%. Results reflected better-than-anticipated revenues.
In the preceding four quarters, Healthpeak’s FFO as adjusted per share beat the Zacks Consensus Estimate on three occasions and met in the remaining period, with the average beat being 1.72%. The graph below depicts this surprise history:
Healthpeak Properties, Inc. Price and EPS Surprise
Amid an increasing life expectancy of the U.S. population and biopharma drug development growth opportunities, the demand for lab real estate assets has been increasing. Therefore, Healthpeak, with a geographically diverse lab portfolio concentrated in the leading biotech markets of South San Francisco, Boston and San Diego, is likely to have experienced healthy demand during the fourth quarter, aiding leasing activity.
A well-diversified tenant base, which includes several industry bellwethers, is expected to have contributed to stable rental revenue generation, boosting the top line.
The Zacks Consensus Estimate for fourth-quarter total revenues is pegged at $553.31 million, indicating a rise of 5.5% from the year-ago reported number.
Moreover, with the senior citizen population on the rise, the healthcare expenditure of this age cohort is likely to have been on the higher end compared with the general population. Healthpeak’s continuing care retirement community portfolio, which refers to its retirement communities that include independent living, assisted living and skilled nursing units, is anticipated to have benefited from this positive expenditure trend, supporting the segment’s quarterly performance.
Our estimate for the quarterly total portfolio same-store cash-adjusted NOI growth is 1% year over year.
Further, PEAK is likely to have continued with its asset-base expansion across its portfolio during the quarter, backed by a robust balance sheet. During the fourth quarter, Healthpeak received the approval of entitlements for Phases II and III of its purpose-built lab development campus — Vantage — in South San Francisco. The company will be able to deliver an additional 1.3 million square feet of lab space. Upon full buildout, this will bring the total square feet of the campus to 1.7 million.
However, a high interest rate environment is a concern for Healthpeak. Elevated rates imply high borrowing costs for the company. For the fourth quarter of 2023, our estimate indicates a year-over-year rise of 11% in the company’s interest expenses.
Before the fourth-quarter earnings release, the company’s activities were not adequate to gain analysts’ confidence. The Zacks Consensus Estimate for the quarterly FFO per share has remained unchanged in the past month at 45 cents. However, it suggests a year-over-year increase of 2.27%.
For 2023, Healthpeak projected its FFO as adjusted per share in the range of $1.76-$1.78. This is based on the company’s expectation for total portfolio same-store cash-adjusted NOI growth of 4.25-5.25%.
Our estimate for the 2023 total portfolio same-store cash-adjusted NOI growth is 5.2% year over year. We estimate a year-over-year increase of 17% in its 2023 interest expenses.
For the full year, the Zacks Consensus Estimate for FFO as adjusted per share is pegged at $1.77. The figure indicates a 1.72% increase year over year on 5.70% year-over-year growth in revenues to $2.18 billion.
Here Is What Our Quantitative Model Predicts:
Our proven model does not conclusively predict a surprise in terms of FFO per share for PEAK this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an FFO beat, which is not the case here.
Healthpeak currently carries a Zacks Rank of 3 and has an Earnings ESP of -1.38%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks That Warrant a Look
Here are two stocks from the broader REIT sector — VICI Properties Inc. (VICI - Free Report) and American Homes 4 Rent (AMH - Free Report) — you may want to consider as our model shows that these have the right combination of elements to report a surprise this quarter.
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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What's in the Cards for Healthpeak (PEAK) This Earnings Season?
Healthpeak Properties, Inc. is slated to report fourth-quarter and full-year 2023 results on Feb 8 after market close. The quarterly results are expected to reflect year-over-year growth 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 per share of 45 cents, beating the Zacks Consensus Estimate by 2.27%. Results reflected better-than-anticipated revenues.
In the preceding four quarters, Healthpeak’s FFO as adjusted per share beat the Zacks Consensus Estimate on three occasions and met in the remaining period, with the average beat being 1.72%. 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
Amid an increasing life expectancy of the U.S. population and biopharma drug development growth opportunities, the demand for lab real estate assets has been increasing. Therefore, Healthpeak, with a geographically diverse lab portfolio concentrated in the leading biotech markets of South San Francisco, Boston and San Diego, is likely to have experienced healthy demand during the fourth quarter, aiding leasing activity.
A well-diversified tenant base, which includes several industry bellwethers, is expected to have contributed to stable rental revenue generation, boosting the top line.
The Zacks Consensus Estimate for fourth-quarter total revenues is pegged at $553.31 million, indicating a rise of 5.5% from the year-ago reported number.
Moreover, with the senior citizen population on the rise, the healthcare expenditure of this age cohort is likely to have been on the higher end compared with the general population. Healthpeak’s continuing care retirement community portfolio, which refers to its retirement communities that include independent living, assisted living and skilled nursing units, is anticipated to have benefited from this positive expenditure trend, supporting the segment’s quarterly performance.
Our estimate for the quarterly total portfolio same-store cash-adjusted NOI growth is 1% year over year.
Further, PEAK is likely to have continued with its asset-base expansion across its portfolio during the quarter, backed by a robust balance sheet. During the fourth quarter, Healthpeak received the approval of entitlements for Phases II and III of its purpose-built lab development campus — Vantage — in South San Francisco. The company will be able to deliver an additional 1.3 million square feet of lab space. Upon full buildout, this will bring the total square feet of the campus to 1.7 million.
However, a high interest rate environment is a concern for Healthpeak. Elevated rates imply high borrowing costs for the company. For the fourth quarter of 2023, our estimate indicates a year-over-year rise of 11% in the company’s interest expenses.
Before the fourth-quarter earnings release, the company’s activities were not adequate to gain analysts’ confidence. The Zacks Consensus Estimate for the quarterly FFO per share has remained unchanged in the past month at 45 cents. However, it suggests a year-over-year increase of 2.27%.
For 2023, Healthpeak projected its FFO as adjusted per share in the range of $1.76-$1.78. This is based on the company’s expectation for total portfolio same-store cash-adjusted NOI growth of 4.25-5.25%.
Our estimate for the 2023 total portfolio same-store cash-adjusted NOI growth is 5.2% year over year. We estimate a year-over-year increase of 17% in its 2023 interest expenses.
For the full year, the Zacks Consensus Estimate for FFO as adjusted per share is pegged at $1.77. The figure indicates a 1.72% increase year over year on 5.70% year-over-year growth in revenues to $2.18 billion.
Here Is What Our Quantitative Model Predicts:
Our proven model does not conclusively predict a surprise in terms of FFO per share for PEAK this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an FFO beat, which is not the case here.
Healthpeak currently carries a Zacks Rank of 3 and has an Earnings ESP of -1.38%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks That Warrant a Look
Here are two stocks from the broader REIT sector — VICI Properties Inc. (VICI - Free Report) and American Homes 4 Rent (AMH - Free Report) — you may want to consider as our model shows that these have the right combination of elements to report a surprise this quarter.
VICI Properties, scheduled to report quarterly numbers on Feb 22, has an Earnings ESP of +2.16% and carries a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.
American Homes 4 Rent, slated to release quarterly numbers on Feb 22, has an Earnings ESP of +0.80% and carries a Zacks Rank of 3 at present.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
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.