Welltower Gears Up to Report Q4 Earnings: What's in the Cards?

Welltower, Inc. WELL is slated to report fourth-quarter 2025 results on Feb. 10, after market close. The quarterly results are likely to reflect year-over-year growth in revenues and normalized funds from operations (FFO) per share.

In the last reported quarter, this Toledo, OH-based healthcare real estate investment trust (REIT) witnessed a normalized FFO per share of $1.34, beating the Zacks Consensus Estimate of $1.30. 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 all occasions, the average beat being 3.31%. 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.

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.

The Zacks Consensus Estimate for quarterly total revenues is pegged at $2.71 billion, suggesting an increase of 20.6% from the prior-year period’s reported number.

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.

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 2 cents upward to $1.44 in the past month. The figure suggests an increase of 27.4% from the year-ago reported number.

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

What Our Quantitative Model Predicts

Our proven model predicts a likely surprise 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 the case here.

Welltower currently has an Earnings ESP of +0.58% and carries a Zacks Rank of 3. 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, W.P. Carey WPC and Host Hotels & Resorts HST, you may want to consider, as our model shows that these have the right combination of elements to report an FFO beat this quarter.

WPC is slated to report quarterly numbers on Feb. 10. WPC has an Earnings ESP of +1.06% and a Zacks Rank of 2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

HST is slated to report quarterly numbers on Feb. 18. HST has an Earnings ESP of +1.71% 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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