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Why Is Healthpeak (PEAK) Down 1.1% Since Last Earnings Report?

·3 min read

It has been about a month since the last earnings report for Healthpeak (PEAK). Shares have lost about 1.1% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Healthpeak due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.

Healthpeak Beats on Q2 FFO & Revenues, Hikes '21 View

Healthpeak reported second-quarter 2021 FFO as adjusted of 40 cents per share, surpassing the Zacks Consensus Estimate by a whisker. The reported figure remained flat year over year.

The healthcare real estate investment trust (REIT) generated revenues of $476.2 million, outpacing the Zacks Consensus Estimate of $471.5 million. Also, the figure was 16.6% higher than the year-ago number.

The performance was backed by revenue growth. However, weakness in the CCRC portfolio affected results.

Behind the Headlines

For second-quarter 2021, the company registered 1.2% growth in adjusted cash same-store portfolio NOI.

It witnessed 7.4% and 4.1% year-over-year growth in the cash same-store portfolio NOI for its life-science and medical office segments, respectively. However, cash same-store portfolio NOI for the CCRC portfolio declined 23.2% year over year.

Portfolio Activity

In the second quarter, the company closed the buyouts for $425 million for medical office buildings.

Healthpeak earlier initiated a strategy to dispose of its senior housing triple-net and SHOP assets worth $4 billion. Making significant progress on the strategy, it aggregated gross proceeds of $3.8 billion from closed dispositions since July 2020.

Liquidity

Healthpeak had cash and cash equivalents of $96.9 million as of Jun 30, 2021, up from $44.2 million recorded at the end of 2020. As of the second-quarter end, net debt to adjusted EBITDAre was 4.6X.

Outlook

Healthpeak updated the guidance for 2021 and expects FFO as adjusted per share of $1.55-$1.61 compared with $1.53-$1.61 mentioned earlier.

Same-store cash-adjusted NOI growth for 2021 is expected to be 2.25-3.75% for the total portfolio.

How Have Estimates Been Moving Since Then?

It turns out, fresh estimates have trended downward during the past month.

VGM Scores

Currently, Healthpeak has a subpar Growth Score of D, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of this revision has been net zero. Notably, Healthpeak has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.


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