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Welltower Inc. (WELL - Free Report) recently withdrew its 2020 guidance, and updated on its operating and liquidity measures in light of the coronavirus pandemic.
The company had earlier projected 2020 normalized funds from operations (FFO) per share at $4.20-$4.30. In addition, the company expected its 2020 average blended same-store NOI to be up 1.5-2.5%.
The senior housing operating portfolio, which generates a significant portion of the company’s net operating income, has witnessed a further decline in occupancy since Apr 1, 2020 due to the intensification of move-in criteria, and screening in states like New York, New Jersey, Massachusetts, and Washington. Occupancy level fell from 85.4% in Mar 27 to 84.8% as of Apr 3 to 84.2% as of Apr 10. This declining trend is likely to prevail, given the move-in restrictions, further expanding to additional markets.
In addition, the company has witnessed a rise in operating expenses, of late. This amounted to about $7 million in March 2020, due to higher labor costs and procurement costs of personal protective equipment (PPE). Though the reduction in occupancy in the senior housing portfolio might result in some variable cost savings, the company predicts a 5% rise in senior housing portfolio expenses than the earlier projections.
Nevertheless, the company has been taking steps to bolster its liquidity and has announced measures to solidify the balance sheet. Welltower has $3.5 billion of near-term available liquidity, with no significant unsecured debt maturities till 2023.
Also, it closed on the previously-announced $1-billion two-year unsecured term loan. The company has also been making dispositions and concluded $781 million worth of such activities on a pro rata basis since the beginning of the year through Apr 17. Welltower also noted that it has concluded pro rata acquisitions and joint ventures of about $400 million, at a year one blended rate of 5.6%.
Therefore, Welltower, with its sound liquidity position and diversified portfolio, is anticipated to sail through these uncertain times.
SBA Communications Corporation’s (SBAC - Free Report) FFO per share estimate for the ongoing year moved up 1.3% to $9.37 over the past two months. The stock currently carries a Zacks Rank of 2 (Buy).
Plymouth Industrial REIT’s (PLYM - Free Report) Zacks Consensus Estimate for 2020 FFO per share moved marginally north to $2.05 over the past two months. The stock currently holds a Zacks Rank of 2.
Gladstone Land Corp’s (LAND - Free Report) FFO per share estimate for the current year climbed 1.6% to 62 cents in the past month. The stock currently carries a Zacks Rank #2.
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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Welltower Withdraws 2020 Guidance Amid Coronavirus Crisis
Welltower Inc. (WELL - Free Report) recently withdrew its 2020 guidance, and updated on its operating and liquidity measures in light of the coronavirus pandemic.
The company had earlier projected 2020 normalized funds from operations (FFO) per share at $4.20-$4.30. In addition, the company expected its 2020 average blended same-store NOI to be up 1.5-2.5%.
The senior housing operating portfolio, which generates a significant portion of the company’s net operating income, has witnessed a further decline in occupancy since Apr 1, 2020 due to the intensification of move-in criteria, and screening in states like New York, New Jersey, Massachusetts, and Washington. Occupancy level fell from 85.4% in Mar 27 to 84.8% as of Apr 3 to 84.2% as of Apr 10. This declining trend is likely to prevail, given the move-in restrictions, further expanding to additional markets.
In addition, the company has witnessed a rise in operating expenses, of late. This amounted to about $7 million in March 2020, due to higher labor costs and procurement costs of personal protective equipment (PPE). Though the reduction in occupancy in the senior housing portfolio might result in some variable cost savings, the company predicts a 5% rise in senior housing portfolio expenses than the earlier projections.
Nevertheless, the company has been taking steps to bolster its liquidity and has announced measures to solidify the balance sheet. Welltower has $3.5 billion of near-term available liquidity, with no significant unsecured debt maturities till 2023.
Also, it closed on the previously-announced $1-billion two-year unsecured term loan. The company has also been making dispositions and concluded $781 million worth of such activities on a pro rata basis since the beginning of the year through Apr 17. Welltower also noted that it has concluded pro rata acquisitions and joint ventures of about $400 million, at a year one blended rate of 5.6%.
Therefore, Welltower, with its sound liquidity position and diversified portfolio, is anticipated to sail through these uncertain times.
Shares of this Zacks Rank #4 (Sell) company have depreciated 31.6% so far this year, while its industry has declined 4.5%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Stocks to Consider
SBA Communications Corporation’s (SBAC - Free Report) FFO per share estimate for the ongoing year moved up 1.3% to $9.37 over the past two months. The stock currently carries a Zacks Rank of 2 (Buy).
Plymouth Industrial REIT’s (PLYM - Free Report) Zacks Consensus Estimate for 2020 FFO per share moved marginally north to $2.05 over the past two months. The stock currently holds a Zacks Rank of 2.
Gladstone Land Corp’s (LAND - Free Report) FFO per share estimate for the current year climbed 1.6% to 62 cents in the past month. The stock currently carries a Zacks Rank #2.
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.
Breakout Biotech Stocks with Triple-Digit Profit Potential
The biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.
Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of +50%, +83% and +164% in as little as 2 months. The stocks in this report could perform even better.
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