Ventas Stock Rallies 24.5% in Six Months: Will the Trend Last?

Shares of Ventas VTR have risen 24.5% over the past six months against the industry’s 0.2% fall.

Ventas’ diverse portfolio of healthcare real estate assets in key markets, including the United States and the U.K., is poised to capitalize on favorable industry fundamentals. The senior housing operating portfolio (SHOP) is likely to benefit from the aging population and the rising healthcare expenditures by senior citizens. The outpatient medical (OM) portfolio is expected to gain from the favorable outpatient visit trends. Ventas’ accretive investments to expand its research portfolio also look promising.

Analysts seem positive on this Zacks Rank #3 (Hold) REIT. The Zacks Consensus Estimate for its 2025 FFO per share has been revised marginally northward to $3.48 over the past month.

Factors Behind VTR’s Stock Price Rise

The senior citizens’ population is expected to increase in the years ahead. According to Ventas’ third-quarter 2025 earnings presentation, the U.S. population aged 80 years and above is expected to grow 28% over the next five years, driving significant demand for senior housing. Hence, Ventas is well-prepared for a compelling multiyear growth opportunity with an expectation of a rising senior citizens’ population in the years ahead and low new supply in its markets.

Ventas’ senior housing portfolio is positioned in markets with favorable demographics, strong net absorption and affordability. This healthcare REIT is experiencing healthy occupancy levels, backed by an acceleration in the SHOP demand. It plans to continue to drive SHOP growth and expand its SHOP footprint with accretive investments. The strategy of converting its lower-occupied triple-net communities to SHOP bolsters the long-term growth potential in the SHOP portfolio. In the third quarter of 2025, Ventas generated 15.9% same-store cash NOI year-over-year growth in the SHOP portfolio.

Amid growing outpatient trends, Ventas is committed to capitalizing on this upside within its OM&R portfolio, which includes outpatient medical buildings and research centers. From 2020 to 2030, the 65+ aged population is expected to grow approximately 30%. Therefore, this portfolio is well-positioned to capitalize on this rising demand.

Ventas follows a disciplined capital-recycling strategy, through which it disposes of non-core assets and redeploys the proceeds in premium asset acquisitions. Such efforts help the company improve its financial position and address the concerns surrounding the tenant base. In the third quarter of 2025, Ventas sold four properties in its OM&R segment for $9.8 million and five senior housing communities from its SHOP segment for $68.1 million at its share. During the same period, it acquired 20 senior housing communities as part of its SHOP segment for $1.1 billion at its share.

Ventas has been making efforts to enhance its liquidity position and financial strength. As of Sept. 30, 2025, the company had approximately $4.1 billion of liquidity. In the third quarter of 2025, its net debt to further adjusted EBITDA improved to 5.3X from 6.3X at the prior-year quarter end. Its access to diverse capital sources through capital recycling, third-party (VIM), on-balance sheet financing and internal cash flow provides ample financial flexibility and is likely to support its growth endeavors.

Risks Likely to Affect VTR’s Positive Trend

Ventas operates in a competitive market and competes with national and local healthcare operators. Also, the company’s operators contend with peers for occupancy. This significantly limits its power to raise rents and drive profitability, as well as crack deals at attractive rates.

Moreover, the company has a substantial debt burden, and its total debt as of Sept. 30, 2025, was approximately $12.57 billion. With a high level of debt, interest expenses are likely to remain elevated. 

Stocks to Consider

Some better-ranked stocks from the broader REIT sector are Digital Realty Trust DLR and Cousins Properties CUZ, each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Zacks Consensus Estimate for DLR’s 2025 FFO per share is pegged at $7.35, which indicates year-over-year growth of 9.5%.

The Zacks Consensus Estimate for WPC’s full-year FFO per share stands at $2.84, which calls for an increase of 5.6% from the year-ago period.

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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