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Ventas (VTR) Likely to Beat Q3 Earnings: Stock to Gain?
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Healthcare real estate investment trust (“REIT”) Ventas, Inc. (VTR - Free Report) is expected to report third-quarter 2016 results on Oct 28, before the market opens. Last quarter, the company delivered in-line results.
For the trailing four quarters, Ventas posted an average positive surprise of 1.69%, surpassing estimates on three occasions. The Zacks Consensus Estimate for the third-quarter funds from operations (“FFO”) is currently pegged at $1.01.
Let’s see how things have shaped up for this announcement.
Our proven model shows that Ventas is likely to beat estimates because it has the right combination of two key ingredients. A stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), #2 (Buy) or #3 (Hold) to beat estimates, and Ventas has the right mix. Please check our Earnings ESP Filter that enables you to find stocks that are expected to come out with earnings surprises.
Zacks ESP: The Earnings ESP, which represents the percentage difference between the Most Accurate Estimate of $1.02 and the Zacks Consensus Estimate of $1.01, is +0.99%. This is a meaningful and leading indicator of a likely positive surprise.
Zacks Rank: Ventas’ Zacks Rank #3 when combined with a positive ESP makes us reasonably confident of a positive surprise this season.
Conversely, we caution against stocks with Zacks Rank #4 or #5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
What’s Driving the Better-than-Expected Earnings?
Ventas is focusing on quality acquisitions to boost its position in the healthcare REIT industry. In the third quarter, the company completed the acquisition of significantly all of the life science and medical real estate assets of Wexford Science & Technology, LLC., marking the company’s foray into the thriving university-affiliated life science real estate business. It is also estimated to be accretive to the company’s normalized FFO per share immediately.
Ventas has a large and diversified portfolio in the healthcare sector with exposure to all types of facilities. This allows the REIT to capitalize on a wide range of opportunities.
Stocks to Consider
Here are three other REITs that you may want to consider as our model shows that they also have the right combination of elements to post an earnings beat this quarter:
Armada Hoffler Properties, Inc. (AHH - Free Report) , slated to release earnings results on Nov 1, has an Earnings ESP of +4.17% and a Zacks Rank #3.
Post Properties Inc. , slated to release earnings results on Oct 31, has an Earnings ESP of +1.24% and a Zacks Rank #2.
Note: All EPS numbers presented in this write up represent funds from operations (FFO) per share. FFO, a widely used metric to gauge the performance of REITs, is obtained after adding depreciation and amortization and other non-cash expenses to net income.
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Ventas (VTR) Likely to Beat Q3 Earnings: Stock to Gain?
Healthcare real estate investment trust (“REIT”) Ventas, Inc. (VTR - Free Report) is expected to report third-quarter 2016 results on Oct 28, before the market opens. Last quarter, the company delivered in-line results.
For the trailing four quarters, Ventas posted an average positive surprise of 1.69%, surpassing estimates on three occasions. The Zacks Consensus Estimate for the third-quarter funds from operations (“FFO”) is currently pegged at $1.01.
Let’s see how things have shaped up for this announcement.
VENTAS INC Price and EPS Surprise
VENTAS INC Price and EPS Surprise | VENTAS INC Quote
Why a Likely Positive Surprise?
Our proven model shows that Ventas is likely to beat estimates because it has the right combination of two key ingredients. A stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), #2 (Buy) or #3 (Hold) to beat estimates, and Ventas has the right mix. Please check our Earnings ESP Filter that enables you to find stocks that are expected to come out with earnings surprises.
Zacks ESP: The Earnings ESP, which represents the percentage difference between the Most Accurate Estimate of $1.02 and the Zacks Consensus Estimate of $1.01, is +0.99%. This is a meaningful and leading indicator of a likely positive surprise.
Zacks Rank: Ventas’ Zacks Rank #3 when combined with a positive ESP makes us reasonably confident of a positive surprise this season.
Conversely, we caution against stocks with Zacks Rank #4 or #5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
What’s Driving the Better-than-Expected Earnings?
Ventas is focusing on quality acquisitions to boost its position in the healthcare REIT industry. In the third quarter, the company completed the acquisition of significantly all of the life science and medical real estate assets of Wexford Science & Technology, LLC., marking the company’s foray into the thriving university-affiliated life science real estate business. It is also estimated to be accretive to the company’s normalized FFO per share immediately.
Ventas has a large and diversified portfolio in the healthcare sector with exposure to all types of facilities. This allows the REIT to capitalize on a wide range of opportunities.
Stocks to Consider
Here are three other REITs that you may want to consider as our model shows that they also have the right combination of elements to post an earnings beat this quarter:
Ashford Hospitality Prime, Inc. , scheduled to release results on Nov 2, has an Earnings ESP of +9.76% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Armada Hoffler Properties, Inc. (AHH - Free Report) , slated to release earnings results on Nov 1, has an Earnings ESP of +4.17% and a Zacks Rank #3.
Post Properties Inc. , slated to release earnings results on Oct 31, has an Earnings ESP of +1.24% and a Zacks Rank #2.
Note: All EPS numbers presented in this write up represent funds from operations (FFO) per share. FFO, a widely used metric to gauge the performance of REITs, is obtained after adding depreciation and amortization and other non-cash expenses to net income.
Confidential from Zacks
Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>