Ventas, Inc. VTR reported third-quarter 2024 normalized funds from operations (FFO) per share of 80 cents, in line with the Zacks Consensus Estimate. The reported figure increased 6.7% from the prior-year quarter’s tally.

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Results reflect better-than-anticipated revenues. Ventas’ same-store cash net operating income (NOI) increased year over year on strong performance in the senior housing operating portfolio (SHOP), outpatient medical and research (OM&R) portfolio and triple-net leased properties. The company has improved its 2024 outlook.

VTR reported revenues of $1.24 billion in the third quarter, which beat the Zacks Consensus Estimate of $1.21 billion. The figure increased 7.5% on a year-over-year basis.

Per Debra A. Cafaro, the chairman and CEO of Ventas, “Ventas delivered another strong quarter executing on our focused strategy to capture the unprecedented multiyear growth opportunity in senior housing. We drove occupancy and revenue outperformance and double-digit NOI growth in our senior housing operating portfolio, supported by broad-based demand."

Ventas’ Quarter in Detail

In the reported quarter, same-store cash NOI for the total property portfolio (1,191 assets) increased 7.6% to $461.3 million from the prior-year quarter.

Segment-wise, the same-store cash NOI for the SHOP (488 assets) climbed 15.3% year over year to $193.6 million. Higher occupancy of 87.0% compared to 83.5% recorded for the year-ago quarter and revenue per occupied room (RevPOR) growth of 4.4% resulted in a margin expansion of 150 basis points (bps), aiding the rise in the segment’s same-store cash NOI.

For the OM&R portfolio (416 assets), same-store cash NOI improved 2.1% year over year to $134.2 million, while the cash NOI margin of 65.4% decreased 50 bps over the same period.

The triple-net leased portfolio’s (287 assets) same-store cash NOI rose 3.2% year over year to $133.5 million.

Portfolio Activity

From the start of the year to Oct. 30, 2024, VTR closed $1.4 billion of senior housing investments, with an additional $300 million under contract and expected to close by year-end.

Balance Sheet Position

Ventas exited the third quarter of 2024 with cash and cash equivalents of $1.1 billion, up from $557.1 million as of June 30, 2024.

Moreover, it ended the quarter with $4 billion of liquidity and a net debt to further adjusted EBITDA ratio of 6.3, declining by 0.1 quarter over quarter.

2024 Outlook

Ventas improved its guidance for 2024.

It now expects 2024 normalized FFO per share in the range of $3.14-$3.18, revised from $3.12-$3.18 guided earlier. The Zacks Consensus Estimate for the same is currently pegged at $3.18, which stands within the guided range.

The total same-store cash NOI growth is now estimated between 6.75% and 8%, up from 6.5%-8% projected earlier. The SHOP segment's same-store cash NOI is now anticipated between 14% and 16%, up from the prior guidance of 13-16%.

The OM&R portfolio segment's same-store cash NOI remained unchanged at 2.75-3.25%, and the estimation for triple-net leased segment’s same-store cash NOI, too, remained unrevised at 1.5-2%.

Ventas currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Ventas, Inc. Price, Consensus and EPS Surprise

Ventas, Inc. price-consensus-eps-surprise-chart | Ventas, Inc. Quote

Performance of Other Healthcare REITs

Healthpeak Properties, Inc. DOC reported a third-quarter 2024 FFO as adjusted per share of 45 cents, beating the Zacks Consensus Estimate by a penny. The reported figure remained unchanged from the prior-year quarter.

Results reflected better-than-anticipated revenues. Growth in total merger-combined same-store cash (adjusted) NOI was witnessed across the portfolio. However, higher interest expenses undermine the results to an extent. The company revised its 2024 outlook.

Welltower Inc. WELL reported a third-quarter 2024 normalized FFO per share of $1.11, which surpassed the Zacks Consensus Estimate of $1.04. The reported figure improved 20.7% year over year.

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 the SSNOI growth in the senior housing operating portfolio. The company also raised its guidance for 2024.

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.

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