What's in the Offing for Ventas Stock This Earnings Season?

Ventas, Inc. VTR is scheduled to report third-quarter 2025 results on Oct. 29, after market close. The quarterly results are likely to display year-over-year growth in revenues and normalized funds from operations (FFO) per share.

In the last reported quarter, this Chicago-based healthcare real estate investment trust (REIT) delivered a normalized FFO per share of 87 cents, beating the Zacks Consensus Estimate of 85 cents. The quarterly results reflected a year-over-year increase in same-store cash net operating income on strong performance in the SHOP, OM&R portfolio and triple-net leased properties.

Ventas’ normalized FFO per share surpassed the Zacks Consensus Estimate in three of the trailing four quarters and met in the remaining period, with the average beat being 1.51%. The graph below depicts this surprise history:

Ventas, Inc. Price and EPS Surprise

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

Factors at Play

In the third quarter, Ventas’ senior housing operating portfolio (SHOP) is likely to have benefited from an aging U.S. population and a rise in healthcare expenditure by this age cohort, which is generally higher than the average population. With the segment witnessing positive net move-ins, occupancy is expected to have remained high.

A well-diversified tenant base with long-term leases is expected to have contributed well to stable rental revenue generation, boosting the top line.

However, the triple-net leased properties are likely to have been affected during the to-be-reported quarter. Further, high interest expenses are expected to have cast a pall on the company’s performance to some extent.

VTR’s Q3 Projections

The Zacks Consensus Estimate for third-quarter revenues is currently pegged at $1.43 billion, implying a 16% increase from the prior-year quarter’s reported figure.

The Zacks Consensus Estimate for third-quarter resident fees and services is pegged at $1.05 billion, suggesting an increase from $845.5 million reported in the year-ago period.

The consensus mark for outpatient medical and research portfolio rental income for the third quarter is pegged at $224.1 million, indicating an increase from $221 million reported in the year-ago period.

However, the Zacks Consensus Estimate for third-quarter triple-net leased properties' rental income is pegged at $149.4 million, suggesting a decrease from $155.4 million reported in the year-ago period.

Ventas’ activities during the soon-to-be-reported quarter were inadequate to gain analysts’ confidence. The Zacks Consensus Estimate for third-quarter FFO per share has decreased a cent to 87 cents over the past three months. However, the figure implies an increase of 8.8% from the year-ago quarter’s reported number.

What Our Quantitative Model Predicts

Our proven model likely predicts a surprise in terms of FFO per share for Ventas 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 the case here.

Ventas currently has an Earnings ESP of +0.84% and a Zacks Rank of 3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Other Stocks That Warrant a Look

Here are two stocks from the broader REIT industry — Extra Space Storage EXR and Omega Healthcare Investors OHI — that you may want to consider, as our model shows that these also have the right combination of elements to report a surprise this quarter.

Extra Space Storage is slated to report quarterly numbers on Oct. 29. EXR has an Earnings ESP of +0.23% and carries a Zacks Rank of 3 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

OHI, scheduled to report quarterly numbers on Oct. 30, has an Earnings ESP of +0.65% and a Zacks Rank of 3.

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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This article originally published on Zacks Investment Research (zacks.com).

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