Healthpeak Properties, Inc. (DOC Quick QuoteDOC - Free Report) is slated to report third-quarter 2024 results on Oct. 24 after market close. While the quarterly results are expected to reflect year-over-year growth in revenues, funds from operations (FFO) per share might exhibit a decline.

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In the last reported quarter, this healthcare real estate investment trust (REIT) posted an FFO as adjusted per share of 45 cents, beating the Zacks Consensus Estimate by 2.27%. Results reflected better-than-anticipated revenues. Moreover, growth in total merger-combined same-store cash (adjusted) net operating income was witnessed across the portfolio.

In the preceding four quarters, Healthpeak’s FFO, as adjusted per share, surpassed the Zacks Consensus Estimate on all occasions, with the average beat being 2.26%. The graph below depicts this surprise history:

Healthpeak Properties, Inc. Price and EPS Surprise

Healthpeak Properties, Inc. price-eps-surprise | Healthpeak Properties, Inc. Quote

Factors at Play for Healthpeak

The increasing life expectancy of the U.S. population and biopharma drug development growth opportunities have promoted lab real estate market fundamentals.  Healthpeak’s focus on the lab segment is a strategic fit and is expected to have been positively impacted by this tailwind, aiding revenue growth in the third quarter.

Moreover, the senior citizen population is on the rise, and the healthcare expenditure of this age cohort is usually on the higher end compared with the general population. Healthpeak’s continuing care retirement community portfolio, which refers to its retirement communities that include independent living, assisted living and skilled nursing units, is anticipated to have benefited from this positive expenditure trend, supporting the segment’s quarterly performance.

For the third quarter, the Zacks Consensus Estimate for DOC’s rental and related revenues currently stands at $549.6 million, implying growth of 31.8% from the prior-year period’s reported figure.

The Zacks Consensus Estimate for third-quarter total revenues is pegged at $689.6 million, indicating a rise of 24% from the year-ago reported number.

However, the elevated interest rate during the third quarter is likely to have been a spoilsport for Healthpeak.

Before the third-quarter earnings release, the company’s activities were inadequate to gain analysts’ confidence. The Zacks Consensus Estimate for the quarterly FFO per share has remained unchanged at 44 cents over the past three months. The figure suggests a 2.22% decrease from the year-ago quarter’s tally.

What Our Quantitative Model Predicts for Healthpeak

Our proven model does not conclusively predict a surprise in terms of FFO per share for DOC 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 not the case here.

Healthpeak currently has an Earnings ESP of -0.38% 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.

Stocks That Warrant a Look

Here are two stocks from the healthcare REIT sector — American Healthcare REIT, Inc. (AHR Quick QuoteAHR - Free Report) and Ventas (VTR Quick QuoteVTR - Free Report) — that you may want to consider as our model shows that these have the right combination of elements to report a surprise this quarter.

American Healthcare REIT, Inc., scheduled to report quarterly numbers on Nov. 12, has an Earnings ESP of +2.06% and sports a Zacks Rank of 1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Ventas, slated to release quarterly numbers on Oct. 30, has an Earnings ESP of +0.97% and carries a Zacks Rank of 3 at present.

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.