It has been about a month since the last earnings report for Ventas (VTR). Shares have added about 10.9% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Ventas due for a pullback? 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 catalysts.
Ventas' Q1 FFO & Revenues Beat Estimates on NOI Growth
Ventas reported first-quarter 2019 normalized FFO of 99 cents, beating the Zacks Consensus Estimate of 96 cents. However, the figure comes in lower than the year-ago tally of $1.05.
The company witnessed higher rental income from its office and triple net leased portfolio.
Ventas posted revenues of $942.9 million, which surpassed the Zacks Consensus Estimate of $919.2 million. The revenue figure, however, compares unfavorably with the year-ago number of $943.7 million.
Quarter in Detail
For the first quarter, same-store cash NOI growth for the total property portfolio (1,139 assets) inched up 1.1% year over year. Segment wise, same-store cash NOI for the triple net leased portfolio grew 2.2%, the office portfolio rose 3.8%, while seniors-housing operating portfolio registered a decline of 2.2%.
During the quarter, Ventas opened Sutter Van Ness medical office building (MOB), its trophy MOB development in Downtown San Francisco. The property, spanning 239,000 square feet of space is anchored by Sutter Health, is currently 83% leased.
Ventas exited first-quarter 2019 with cash and cash equivalents of around $82.5 million, up from $72.3 million as of the prior-quarter end.
Ventas reiterated its 2019 normalized FFO per share outlook of $3.75-$3.85. The 2019 Nareit FFO is expected in the range of $3.70-$3.82.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates.
Currently, Ventas has an average Growth Score of C, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% 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.
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Ventas has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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