We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
What's in the Offing for Healthpeak's (PEAK) Q1 Earnings?
Read MoreHide Full Article
Healthpeak Properties is scheduled to report first-quarter 2020 earnings on May 5, after market close. While the company’s results will likely reflect year-over-year growth in its revenues, the funds from operations (FFO) per share might display a decline.
In the last reported quarter, this health real estate investment trust (REIT) reported an in-line performance with respect to FFO per share. Results indicated decent performance of almost all segments.
Over the preceding four quarters, the company beat the Zacks Consensus Estimate on three occasions and met in the other, the average beat being 1.75%. The graph below depicts this surprise history:
Healthpeak Properties, Inc. Price and EPS Surprise
Let’s see how things have shaped up prior to the first-quarter earnings release.
Factors at Play
Healthpeak is expected to have benefited from the transformation of its senior-housing operating portfolio (SHOP) asset quality. Specifically, the company has added strategic properties and recycled capital on the back of dispositions to benefit from stronger demographics and increasing penetration. This has likely enabled it to expand the geographic footprint of its senior-housing portfolio in high growth and affluent markets, and enjoy superior cash flows.
The company has also been making strategic efforts to strengthen all three core segments — senior housing, medical office and life science — on the back of acquisitions and portfolio quality-enhancing transactions.
Notably, on Apr 7, Healthpeak issued an update on three of the company’s core business segments, along with its balance sheet and liquidity profile, in light of the coronavirus pandemic. The number of infected patients in the United States has skyrocketed and Healthpeak’s portfolio has not been spared as well.
With respect to the senior housing operating portfolio, which generates 34% of the company’s net operating income (NOI), it noted that total blended occupancy in the SHOP and CCRC portfolios of 83.4% on Mar 31 declined from 83.7% on Mar 15 and 83.8% on Feb 29. There is a decline in move-ins in light of the COVID-19 protocols, sheltering in place, and reduced in-person tours. Particularly, move-ins in the SHOP and CCRC portfolios in March slumped 41% from February 2020 and 50% from March 2019. Also, operations and medical-supply expenses is likely to have flared up.
In the Life-Science Portfolio, which accounts for 31% of NOI, the company executed 314,000 square feet of leasing in the first quarter, 40% of which was executed in March. This comprised around 239,000 square feet of new leasing and 75,000 square feet of renewals at a 30% mark-to-market increase. Per the company, the leasing was ahead of plan through the March-end quarter. However, the company has received a limited number of rent deferral requests. It also expects a slowdown in leasing activity during the pandemic period.
Considering its medical office portfolio, which generates 29% of the company’s NOI, Healthpeak noted that it has received rent relief requests from many of its physician tenants as non-essential surgeries and procedures have been discontinued by many of them. However, the company noted that new and renewal leasing activities across its portfolio led to an expansion of 10 basis points (bps) in occupancy in March.
The company has been taking steps to bolster its liquidity. As of Mar 31, 2020, and pro forma for the acquisition of The Post, the company had no outstanding balances under its revolver and more than $450-million cash balance. This offers the company roughly $3 billion of liquidity.
Amid these, total revenues for the first quarter are pegged at $530.1 million, suggesting year-over-year growth of 21.5%.
However, prior to the first-quarter earnings release, there is lack of any solid catalyst for becoming optimistic about the company’s prospects. In fact, the Zacks Consensus Estimate for the first-quarter FFO per share moved a cent south to 43 cents, over the past week. It also suggests a 2.3% decline year on year.
Here is what our quantitative model predicts:
Our proven model does not conclusively predict a positive surprise in terms of FFO per share for Healthpeak Properties this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of a FFO beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Healthpeak Properties currently carries a Zacks Rank #3 and has an Earnings ESP of -1.20%.
Stocks That Warrant a Look
Here are a few stocks in the REIT sector that you may want to consider, as our model shows that these have the right combination of elements to report a positive surprise this quarter:
Extra Space Storage Inc. (EXR - Free Report) , slated to release first-quarter earnings on May 6, has an Earnings ESP of +0.17% and carries a Zacks Rank of 3 at present.
Americold Realty Trust (COLD - Free Report) , expected to release earnings results on May 7, has an Earnings ESP of +9.74% and currently holds a Zacks Rank #3.
Note: Anything related to earnings presented in this write-up represent funds from operations (FFO) — a widely used metric to gauge the performance of REITs.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
Image: Bigstock
What's in the Offing for Healthpeak's (PEAK) Q1 Earnings?
Healthpeak Properties is scheduled to report first-quarter 2020 earnings on May 5, after market close. While the company’s results will likely reflect year-over-year growth in its revenues, the funds from operations (FFO) per share might display a decline.
In the last reported quarter, this health real estate investment trust (REIT) reported an in-line performance with respect to FFO per share. Results indicated decent performance of almost all segments.
Over the preceding four quarters, the company beat the Zacks Consensus Estimate on three occasions and met in the other, the average beat being 1.75%. The graph below depicts this surprise history:
Healthpeak Properties, Inc. Price and EPS Surprise
Healthpeak Properties, Inc. price-eps-surprise | Healthpeak Properties, Inc. Quote
Let’s see how things have shaped up prior to the first-quarter earnings release.
Factors at Play
Healthpeak is expected to have benefited from the transformation of its senior-housing operating portfolio (SHOP) asset quality. Specifically, the company has added strategic properties and recycled capital on the back of dispositions to benefit from stronger demographics and increasing penetration. This has likely enabled it to expand the geographic footprint of its senior-housing portfolio in high growth and affluent markets, and enjoy superior cash flows.
The company has also been making strategic efforts to strengthen all three core segments — senior housing, medical office and life science — on the back of acquisitions and portfolio quality-enhancing transactions.
Notably, on Apr 7, Healthpeak issued an update on three of the company’s core business segments, along with its balance sheet and liquidity profile, in light of the coronavirus pandemic. The number of infected patients in the United States has skyrocketed and Healthpeak’s portfolio has not been spared as well.
With respect to the senior housing operating portfolio, which generates 34% of the company’s net operating income (NOI), it noted that total blended occupancy in the SHOP and CCRC portfolios of 83.4% on Mar 31 declined from 83.7% on Mar 15 and 83.8% on Feb 29. There is a decline in move-ins in light of the COVID-19 protocols, sheltering in place, and reduced in-person tours. Particularly, move-ins in the SHOP and CCRC portfolios in March slumped 41% from February 2020 and 50% from March 2019. Also, operations and medical-supply expenses is likely to have flared up.
In the Life-Science Portfolio, which accounts for 31% of NOI, the company executed 314,000 square feet of leasing in the first quarter, 40% of which was executed in March. This comprised around 239,000 square feet of new leasing and 75,000 square feet of renewals at a 30% mark-to-market increase. Per the company, the leasing was ahead of plan through the March-end quarter. However, the company has received a limited number of rent deferral requests. It also expects a slowdown in leasing activity during the pandemic period.
Considering its medical office portfolio, which generates 29% of the company’s NOI, Healthpeak noted that it has received rent relief requests from many of its physician tenants as non-essential surgeries and procedures have been discontinued by many of them. However, the company noted that new and renewal leasing activities across its portfolio led to an expansion of 10 basis points (bps) in occupancy in March.
The company has been taking steps to bolster its liquidity. As of Mar 31, 2020, and pro forma for the acquisition of The Post, the company had no outstanding balances under its revolver and more than $450-million cash balance. This offers the company roughly $3 billion of liquidity.
Amid these, total revenues for the first quarter are pegged at $530.1 million, suggesting year-over-year growth of 21.5%.
However, prior to the first-quarter earnings release, there is lack of any solid catalyst for becoming optimistic about the company’s prospects. In fact, the Zacks Consensus Estimate for the first-quarter FFO per share moved a cent south to 43 cents, over the past week. It also suggests a 2.3% decline year on year.
Here is what our quantitative model predicts:
Our proven model does not conclusively predict a positive surprise in terms of FFO per share for Healthpeak Properties this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of a FFO beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Healthpeak Properties currently carries a Zacks Rank #3 and has an Earnings ESP of -1.20%.
Stocks That Warrant a Look
Here are a few stocks in the REIT sector that you may want to consider, as our model shows that these have the right combination of elements to report a positive surprise this quarter:
SBA Communications Corporation (SBAC - Free Report) , set to report quarterly numbers on May 5, has an Earnings ESP of +0.67% and carries a Zacks Rank of 3 currently. You can see the complete list of today’s Zacks #1 Rank stocks here.
Extra Space Storage Inc. (EXR - Free Report) , slated to release first-quarter earnings on May 6, has an Earnings ESP of +0.17% and carries a Zacks Rank of 3 at present.
Americold Realty Trust (COLD - Free Report) , expected to release earnings results on May 7, has an Earnings ESP of +9.74% and currently holds a Zacks Rank #3.
Note: Anything related to earnings presented in this write-up represent funds from operations (FFO) — a widely used metric to gauge the performance of REITs.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
Today, See These 5 Potential Home Runs >>