Ventas Issues Business Update, Raises 2025 Normalized FFO Guidance

Ventas, Inc. VTR recently provided an business update that highlights delivering profitable organic growth in the senior housing. This healthcare REIT also raised its normalized funds from operations (FFO) per share guidance for 2025.

The fundamentals of senior housing continue to be healthy while entering the key selling season, driven by the record growing population aged 80 and above. The key selling season is underway, with projected spot occupancy growth ranging from +30 basis points (bps) to +50 bps sequentially from March 31, 2025, to May 31, 2025.

Ventas’s 2025 Senior Housing Operating Portfolio (SHOP) segment's same-store cash net operating income (NOI) is anticipated to be between 12% to 16%, compared to the prior range of 11% to 16%. It expects SHOP same-store cash NOI year-over-year growth in second half of 2025 to be higher than the first half of 2025, due to timing and slope of key selling season.

The company projected May quarter-to-date same-store average occupancy growth of +230 bps year over year. It also projected May year-to-date same-store average occupancy growth of approximately 270 bps.

2025 Normalized FFO Guidance Raise

Ventas expects 2025 normalized FFO per share in the range of $3.36-$3.46, revised from $3.35-$3.46 stated earlier. The 2025 normalized FFO per share represents approximately 7% year-over-year growth at the midpoint of the guidance range, led by SHOP. The Zacks Consensus Estimate of $3.44 per share stands within the given range.

VTR: In a Snapshot

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

Over the past six months, shares of this Zacks Rank #3 (Hold) company have gained 5% against the industry's decline of 5.3%.

Stocks to Consider

Some better-ranked stocks from the broader REIT sector are VICI Properties VICI and W.P. Carey WPC, each currently carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Zacks Consensus Estimate for VICI’s 2025 FFO per share has moved one cent northward to $2.34 over the past month.

The consensus estimate for WPC’s 2025 FFO per share has been revised upward by 1% to $4.88 over the past month.

Note: Anything related to earnings presented in this write-up represents 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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