Welltower, Inc. WELL is slated to report fourth-quarter and full-year 2024 results on Feb. 11, after market close. The quarterly results are likely to reflect year-over-year growth in revenues and normalized funds from operations (FFO) per share.

See the Zacks Earnings Calendar to stay ahead of market-making news.

In the last reported quarter, this Toledo, OH-based healthcare real estate investment trust (REIT) witnessed a normalized FFO per share of $1.11, beating the Zacks Consensus Estimate by 6.7%. Results reflected a rise in revenues on a year-over-year basis. The total portfolio same-store net operating income (SSNOI) increased year over year, driven by SSNOI growth in the senior housing operating (SHO) portfolio.

Over the preceding four quarters, Welltower’s normalized FFO per share beat the Zacks Consensus Estimate on each occasion, the average beat being 5.33%. The graph below depicts this surprise history:

Welltower Inc. Price and EPS Surprise

Welltower Inc. price-eps-surprise | Welltower Inc. Quote

Factors at Play for WELL

Welltower owns a diversified portfolio in the healthcare real estate industry in the major, high-growth markets of the United States, Canada and the U.K.

During the fourth quarter, the company’s SHO portfolio is likely to have continued to benefit from an aging U.S. population and a rise in healthcare expenditure by this age cohort, which is usually on the higher end compared with the general population. In addition, muted new supply is expected to have provided a favorable operating environment for this portfolio. Welltower’s 2024 guidance assumes 22-24% SSNOI growth in the SHO portfolio.

Further, Welltower’s long-term leases with its healthcare management companies or operators are anticipated to have led to stable revenue generation, boosting its top line.

We expect WELL to have continued with its investment and development activities during the quarter, supported by its solid balance sheet position and capital-recycling efforts.

However, high interest expenses are likely to have been a spoilsport for Welltower during the to-be-reported quarter.

WELL’s Q4 & Full-Year 2024 Projections

The Zacks Consensus Estimate for quarterly total revenues is pegged at $2.12 billion, suggesting a rise of 21.3% from the prior-year period’s reported number.

WELL’s activities during the quarter were adequate to garner analysts’ confidence. The Zacks Consensus Estimate for fourth-quarter normalized FFO per share has been revised a cent upward to $1.12 in the past two months. The figure suggests an increase of 16.7% from the year-ago reported number.

Per its October business update, Welltower expects its 2024 normalized FFO to be in the guidance range of $4.27-$4.33 per share.

For the full year, the Zacks Consensus Estimate for normalized FFO per share is pegged at $4.30. The figure indicates an 18.1% increase year over year on 19.1% year-over-year growth in revenues to $7.91 billion.

What Our Quantitative Model Predicts

Our proven model does not conclusively predict a likely beat in terms of FFO per share for Welltower 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.

Welltower currently has an Earnings ESP of -0.35% and carries a Zacks Rank of 2. 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 broader REIT sector — Highwoods Properties HIW and Host Hotels & Resorts HST — that you may want to consider, as our model shows that these have the right combination of elements to report a surprise this quarter.

Highwoods Properties, scheduled to report quarterly numbers on Feb. 11, has an Earnings ESP of +0.22% and carries a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Host Hotels is slated to report quarterly numbers on Feb. 19. HST has an Earnings ESP of +1.50% and carries a Zacks Rank of 3 presently.

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.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Host Hotels & Resorts, Inc. (HST) : Free Stock Analysis Report

Highwoods Properties, Inc. (HIW) : Free Stock Analysis Report

Welltower Inc. (WELL) : Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research