A month has gone by since the last earnings report for HCP (HCP - Free Report) . Shares have added about 1.2% in that time frame, underperforming the S&P 500.
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 catalysts.
HCP Meets Q4 FFO Estimates, Misses on Revenues
In fourth-quarter 2018, HCP reported year-over-year decline in its FFO as adjusted per share and revenues tally.
HCP reported fourth-quarter 2018 FFO as adjusted of 43 cents per share, meeting the Zacks Consensus Estimate. Comparable FFO as adjusted in the prior-year quarter was 48 cents per share.
It generated revenues of $441.9 million, missing the Zacks Consensus Estimate of $447.9 million. Further, the figure compares unfavorably with the year-ago number of $443.2 million.
Behind the Headlines
HCP witnessed 1.5% year-over-year rise in the three-month cash SPP net operating income (NOI). There was 3.9% growth in life-science cash NOI, 2.5% increase in senior-housing triple-net segment, 1.9% rise in the medical office segment and 4.3% advancement in other non-reportable segments. However, these positives were partly offset by an 11.6% decrease in SHOP cash NOI.
During the quarter under review, HCP completed the previously-announced sales of 19 senior housing communities for $377 million and Shoreline Technology Center for gross proceeds of $1 billion.
Moreover, in 2018, management of 38 senior-housing communities, owned by HCP, was transitioned from Brookdale to other operators.
HCP had cash and cash equivalents of around $110.8 million as of Dec 31, 2018, significantly up from $55.3 million recorded at the end of 2017. Additionally, the company ended the fourth quarter with $1.9 billion available under its $2-billion credit facility.
HCP provided its 2019 FFO as adjusted guidance at $1.70-$1.76 per share. Furthermore, the company expects 2019 SPP cash NOI growth for total portfolio to be 1.25-2.75%.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates.
Currently, HCP has a poor Growth Score of F, however its Momentum Score is doing a bit better with a D. Following the exact same course, the stock was 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 F. If you aren't focused on one strategy, this score is the one you should be interested in.
Estimates have been 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.