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Earnings Miss: Welltower Inc. Missed EPS By 6.5% And Analysts Are Revising Their Forecasts

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Shareholders might have noticed that Welltower Inc. (NYSE:WELL) filed its quarterly result this time last week. The early response was not positive, with shares down 3.6% to US$86.99 in the past week. Revenues of US$1.4b were in line with forecasts, although statutory earnings per share (EPS) came in below expectations at US$0.14, missing estimates by 6.5%. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Welltower after the latest results.

View our latest analysis for Welltower

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earnings-and-revenue-growth

After the latest results, the seven analysts covering Welltower are now predicting revenues of US$5.67b in 2022. If met, this would reflect a solid 11% improvement in sales compared to the last 12 months. Per-share earnings are expected to grow 11% to US$0.80. Before this earnings report, the analysts had been forecasting revenues of US$5.66b and earnings per share (EPS) of US$0.80 in 2022. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.

It will come as no surprise then, to learn that the consensus price target is largely unchanged at US$97.71. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic Welltower analyst has a price target of US$111 per share, while the most pessimistic values it at US$83.00. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or thatthe analysts have a strong view on its prospects.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. It's clear from the latest estimates that Welltower's rate of growth is expected to accelerate meaningfully, with the forecast 15% annualised revenue growth to the end of 2022 noticeably faster than its historical growth of 2.0% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 6.6% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Welltower to grow faster than the wider industry.

The Bottom Line

The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Fortunately, they also reconfirmed their revenue numbers, suggesting sales are tracking in line with expectations - and our data suggests that revenues are expected to grow faster than the wider industry. The consensus price target held steady at US$97.71, with the latest estimates not enough to have an impact on their price targets.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Welltower analysts - going out to 2024, and you can see them free on our platform here.

Before you take the next step you should know about the 5 warning signs for Welltower (1 is a bit concerning!) that we have uncovered.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.