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Welltower (WELL) Up 6.5% Since Last Earnings Report: Can It Continue?

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A month has gone by since the last earnings report for Welltower (WELL - Free Report) . Shares have added about 6.5% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Welltower due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.

Welltower Q1 FFO Meets Estimates, Revenues Up Y/Y

Welltower reported normalized FFO per share of $1.02 for first-quarter 2019, which came in line with the Zacks Consensus Estimate. Further, the figure compares favorably with the year-ago quarter’s reported tally of 99 cents.

Results reflect healthy SSNOI performance of its seniors housing triple-net, outpatient medical and long-term/post-acute care segments.

Moreover, the company posted revenues of nearly $1.27 billion that outpaced the Zacks Consensus Estimate of $1.24 billion. The revenue figure compares favorably with the year-earlier quarter’s reported tally of approximately $1.1 billion.

Quarter in Detail

Total portfolio SSNOI grew 3.1% year over year, driven by growth across all its segments.

Welltower accomplished $367 million of pro-rata gross investments in the first quarter. This included $259 million in acquisitions, $80 million in development funding and $28 million in loans.

This apart, the company also accomplished total dispositions of $612 million and received $14 million in loan payoffs during the March-end quarter.

The company exited the quarter with $249 million of cash and cash equivalents, up from $202.8 million recorded at the end of the prior-year quarter. In addition, as of Mar 31, 2019, it had $2.6 billion of available borrowing capacity under its new primary unsecured credit facility.

2019 Outlook

Welltower reiterated its 2019 normalized FFO per share outlook of $4.10-$4.25.

In addition, the company anticipates its 2019 average blended SSNOI to be up around 1.25-2.25%. Further, full-year disposition proceeds are projected to be around $1.4 billion.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed an upward trend in fresh estimates.

VGM Scores

At this time, Welltower has an average Growth Score of C, however its Momentum Score is doing a lot better with an A. However, 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 D. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Welltower has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.


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