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

Ventas, Inc. VTR is scheduled to report fourth-quarter 2025 results on Feb. 5, 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 88 cents, beating the Zacks Consensus Estimate of 87 cents. The quarterly results reflected a year-over-year increase in same-store cash net operating income on strong performance in the senior housing operating portfolio (SHOP) and outpatient medical research (OM&R) portfolio.

Ventas’ normalized FFO per share surpassed the Zacks Consensus Estimate in all the trailing four quarters, with the average beat being 1.80%. 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 fourth quarter, Ventas’ 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 Q4 Projections

The Zacks Consensus Estimate for fourth-quarter revenues is currently pegged at $1.49 billion, implying a 16.1% increase from the prior-year quarter’s reported figure.

The Zacks Consensus Estimate for fourth-quarter resident fees and services is pegged at $1.11 billion, suggesting an increase from $896.4 million reported in the year-ago period.

The consensus mark for outpatient medical and research portfolio rental income for the fourth quarter is pegged at $229.2 million, indicating an increase from $216.2 million reported in the year-ago period.

Ventas’ activities during the soon-to-be-reported quarter were adequate to gain analysts’ confidence. The Zacks Consensus Estimate for fourth-quarter FFO per share has increased a cent to 89 cents over the past three months. The figure implies an increase of 9.9% from the year-ago quarter’s reported number.

However, the Zacks Consensus Estimate for fourth-quarter triple-net leased properties' rental income is pegged at $144.4 million, suggesting a decrease from $157.4 million reported in the year-ago period.

What Our Quantitative Model Predicts

Our proven model does not conclusively predict 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 not the case here.

Ventas currently has an Earnings ESP of -0.30% and a Zacks Rank #4 (Sell). 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, EastGroup Properties EGP and Welltower, Inc. WELL, you may want to consider, as our model shows that these have the right combination of elements to report an FFO beat this quarter.

EGP is slated to report quarterly numbers on Feb. 4. EGP has an Earnings ESP of +0.55% and a Zacks Rank of 3 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

WELL is slated to report quarterly numbers on Feb. 10. WELL has an Earnings ESP of +0.58% and carries a Zacks Rank of 3 at present.

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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