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Ventas, Inc. VTR is scheduled to report fourth-quarter and full-year 2024 results on Feb. 12, after market close. The quarterly results are likely to display year-over-year growth in revenues and normalized funds from operations (FFO) per share.
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In the last reported quarter, this Chicago-based healthcare real estate investment trust (REIT) delivered a normalized FFO per share of 80 cents, in line with the Zacks Consensus Estimate. The quarterly results reflected better-than-anticipated revenues. Ventas’ same-store cash net operating income increased year over year on strong performance across the portfolio.
Ventas’ normalized FFO per share surpassed the Zacks Consensus Estimate in two of the trailing four quarters and met in the remaining period, with the average beat being 1.67%. 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’ 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 and outpatient medical and research portfolio segments are likely to be 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 resident fees and services is pegged at $850.1 million, suggesting an increase from $775.2 million reported in the year-ago period.
The Zacks Consensus Estimate for fourth-quarter revenues is currently pegged at $1.26 billion, implying an 8.1% increase from the prior-year quarter’s reported figure.
However, the Zacks Consensus Estimate for fourth-quarter triple-net leased rental income is pegged at $151.6 million, suggesting a decrease from the $155.3 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 $220.8 million, indicating decline from $222.1 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 fourth-quarter FFO per share has remained unrevised at 80 cents over the past two months. However, the figure implies an increase of 5.3% from the year-ago quarter’s reported number.