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What's in the Offing for Ventas (VTR) This Earnings Season?
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Ventas, Inc. (VTR - Free Report) is scheduled to report second-quarter 2024 results on Aug 1, after market close. The quarterly results are likely to display year-over-year growth in both revenues and normalized funds from operations (FFO) per share.
In the last reported quarter, this Chicago-based healthcare real estate investment trust (REIT) delivered a normalized FFO per share of 78 cents, beating the Zacks Consensus Estimate by 5.4%. The quarterly results reflected better-than-anticipated revenues. Ventas’ same-store cash net operating income increased year over year on strong performance across the portfolio.
Ventas’ normalized FFO per share surpassed the Zacks Consensus Estimate in three of the trailing four quarters and met in the remaining period, with the average beat being 2.03%. The graph below depicts this surprise history:
In the second quarter, Ventas’ senior housing operating portfolio (SHOP) is likely to have benefited from an aging U.S. population and a rise in healthcare expenditure by this age cohort, which is generally higher than the average population. With the segment witnessing positive net move-ins, occupancy is expected to have remained high.
The increasing life expectancy of the U.S. population is likely to have fueled the demand for life-science assets. Benefiting from this positive trend, Ventas’ research portfolio is anticipated to have fared well during the to-be-reported quarter.
A well-diversified tenant base with long-term leases, is expected to have contributed to stable rental revenue generation, boosting the top line.
The consensus mark for outpatient medical and research portfolio rental income for the second quarter is pegged at $219.42 million, indicating growth from $218.88 million reported in the prior quarter and $215.81 million reported in the year-ago period.
The Zacks Consensus Estimate for second-quarter resident fees and services is pegged at $815.27 million, suggesting an increase from $813.3 million reported in the prior quarter and $724.61 million in the year-ago period.
The Zacks Consensus Estimate for second-quarter revenues is currently pegged at $1.19 billion, implying a 7.7% increase from the prior-year quarter’s reported figure.
Ventas is likely to have continued with its accretive investments in the research portfolio during the quarter, backed by a healthy balance sheet position.
Ventas’ activities during the soon-to-be-reported quarter were adequate to gain analysts’ confidence. The Zacks Consensus Estimate for second-quarter FFO per share has been revised a cent upward over the past month to 79 cents. Moreover, the figure implies an increase of 5.3% from the year-ago quarter’s reported number.
However, the triple-net leased properties segment is likely to be affected during the to-be-reported quarter. The Zacks Consensus Estimate for second-quarter triple-net leased rental income is pegged at $153.42 million, suggesting a decrease from $155.37 million reported in the prior quarter and $154.36 million in the year-ago period.
Moreover, a high interest rate environment is a concern for Ventas. Elevated rates imply high borrowing costs for the company, which would affect its ability to purchase or develop real estate.
What Our Quantitative Model Predicts
Our proven model predicts a likely beat in terms of FFO per share for Ventas this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an FFO beat, which is the case here.
Ventas currently has an Earnings ESP of +1.76% and carries a Zacks Rank of 3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Other Stocks That Warrant a Look
Here are two other stocks from the broader REIT sector — Extra Space Storage (EXR - Free Report) and American Tower (AMT - Free Report) — you may want to consider, as our model shows that these, too, have the right combination of elements to report a surprise this quarter.
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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What's in the Offing for Ventas (VTR) This Earnings Season?
Ventas, Inc. (VTR - Free Report) is scheduled to report second-quarter 2024 results on Aug 1, after market close. The quarterly results are likely to display year-over-year growth in both revenues and normalized funds from operations (FFO) per share.
In the last reported quarter, this Chicago-based healthcare real estate investment trust (REIT) delivered a normalized FFO per share of 78 cents, beating the Zacks Consensus Estimate by 5.4%. The quarterly results reflected better-than-anticipated revenues. Ventas’ same-store cash net operating income increased year over year on strong performance across the portfolio.
Ventas’ normalized FFO per share surpassed the Zacks Consensus Estimate in three of the trailing four quarters and met in the remaining period, with the average beat being 2.03%. The graph below depicts this surprise history:
Ventas, Inc. Price and EPS Surprise
Ventas, Inc. price-eps-surprise | Ventas, Inc. Quote
Factors at Play
In the second quarter, Ventas’ senior housing operating portfolio (SHOP) is likely to have benefited from an aging U.S. population and a rise in healthcare expenditure by this age cohort, which is generally higher than the average population. With the segment witnessing positive net move-ins, occupancy is expected to have remained high.
The increasing life expectancy of the U.S. population is likely to have fueled the demand for life-science assets. Benefiting from this positive trend, Ventas’ research portfolio is anticipated to have fared well during the to-be-reported quarter.
A well-diversified tenant base with long-term leases, is expected to have contributed to stable rental revenue generation, boosting the top line.
The consensus mark for outpatient medical and research portfolio rental income for the second quarter is pegged at $219.42 million, indicating growth from $218.88 million reported in the prior quarter and $215.81 million reported in the year-ago period.
The Zacks Consensus Estimate for second-quarter resident fees and services is pegged at $815.27 million, suggesting an increase from $813.3 million reported in the prior quarter and $724.61 million in the year-ago period.
The Zacks Consensus Estimate for second-quarter revenues is currently pegged at $1.19 billion, implying a 7.7% increase from the prior-year quarter’s reported figure.
Ventas is likely to have continued with its accretive investments in the research portfolio during the quarter, backed by a healthy balance sheet position.
Ventas’ activities during the soon-to-be-reported quarter were adequate to gain analysts’ confidence. The Zacks Consensus Estimate for second-quarter FFO per share has been revised a cent upward over the past month to 79 cents. Moreover, the figure implies an increase of 5.3% from the year-ago quarter’s reported number.
However, the triple-net leased properties segment is likely to be affected during the to-be-reported quarter. The Zacks Consensus Estimate for second-quarter triple-net leased rental income is pegged at $153.42 million, suggesting a decrease from $155.37 million reported in the prior quarter and $154.36 million in the year-ago period.
Moreover, a high interest rate environment is a concern for Ventas. Elevated rates imply high borrowing costs for the company, which would affect its ability to purchase or develop real estate.
What Our Quantitative Model Predicts
Our proven model predicts a likely beat in terms of FFO per share for Ventas this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an FFO beat, which is the case here.
Ventas currently has an Earnings ESP of +1.76% and carries a Zacks Rank of 3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Other Stocks That Warrant a Look
Here are two other stocks from the broader REIT sector — Extra Space Storage (EXR - Free Report) and American Tower (AMT - Free Report) — you may want to consider, as our model shows that these, too, have the right combination of elements to report a surprise this quarter.
Extra Space Storage, scheduled to report quarterly numbers on Jul 30, has an Earnings ESP of +1.00% and carries a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.
American Tower is slated to report quarterly numbers on Jul 30. AMT has an Earnings ESP of +0.71% and carries a Zacks Rank of 2 presently.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
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.