A month has gone by since the last earnings report for HCP, Inc. . Shares have added about 1.9% in that time frame.
Will the recent positive trend continue leading up to its next earnings release, or is HCP due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
HCP Q1 FFO and Revenues Beat Estimates, Reiterates Outlook
HCP reported first-quarter 2018 FFO as adjusted of 48 cents per share, beating the Zacks Consensus Estimate of 46 cents. Comparable FFO as adjusted in the prior-year quarter was 51 cents per share.
Results reflected better-than-expected revenue numbers for the reported quarter.
The company generated revenues of $479.2 million, surpassing the Zacks Consensus Estimate of $458.8 million. However, the figure compared unfavorably with the year-ago number of $492.2 million.
Behind the Headlines
HCP experienced 0.2% year-over-year decline in the three-month cash SPP NOI. Though there was growth of 0.4% in life-science cash NOI, 0.5% increase in senior-housing triple-net and 1.6% rise in the Medical office portfolio, the positives were offset by 6.4% decrease in senior-housing operating portfolio (SHOP) cash NOI.
During the quarter under review, HCP completed the sale of six assets, totaling $275 million to Brookdale Senior Living.
In March 2018, the company announced the transition of management for 24 senior-housing communities owned by HCP from Brookdale to Atria Senior Living. Out of these, 13 have already been transitioned and others are expected to be shifted by the next quarter.
HCP closed the prior-announced $112-million sale of Tandem mezzanine loan investment that resulted in an impairment recovery of $3 million.
HCP had cash and cash equivalents of around $86 million as of Mar 31, 2018, up from $55.3 million recorded at the end of 2017. Further, the company ended the first quarter with $1.0 billion of liquidity from a combination of cash and availability under its $2.0-billion credit facility. It has no major senior notes or secured debt maturities until 2019.
HCP reiterated 2018 FFO as adjusted guidance range, which it expects to be $1.77-$1.83 per share.
Further, the company reaffirmed the 2018 SPP cash NOI growth guidance of 0.25-1.75%.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates. There have been four revisions higher for the current quarter compared to three lower.
At this time, HCP has a subpar Growth Score of D, however its Momentum is doing a bit better with a C. The stock was also allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
The company's stock is suitable solely for momentum based on our styles scores.
Estimates have been broadly trending upward for the stock and the magnitude of these revisions looks promising. Notably, HCP has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.