Welltower Inc. (WELL), boasting a market cap of $69.3 billion, is a real estate investment trust (REIT) focusing on investments with senior housing operators, post-acute providers, and health systems. Based in Ohio, its portfolio is concentrated in high-growth markets in the U.S., Canada, and the U.K.
The REIT has outperformed the broader market over the past 52 weeks. WELL has gained 39.2% over this time frame, while the broader S&P 500 Index ($SPX) has rallied 26.1%. In 2024, shares of WELL are up 28.6%, compared to SPX's 16.5% gains on a YTD basis.
Zooming in further, WELL has also surpassed the iShares Residential and Multisector Real Estate ETF’s (REZ) 18.2% gains over the past 52 weeks and 12.8% returns in 2024.
Thanks to a booming aging population in the West, the stock has soared to new heights in 2024, surpassing the broader market.
The stock surged 1.7% on Jul. 29 following the release of its Q2 earnings report. Although its funds from operations (FFO) of $1.05 per share exceeded Street forecasts, its revenue of $1.8 billion fell short of analysts’ expectations of $1.9 billion. Moreover, Welltower now projects 2024 normalized FFO per share between $4.13 and $4.21, up from the prior-guided range of $4.05 to $4.17.
For the current fiscal year, ending in December, analysts expect WELL’s EPS to grow 15.1% annually to $4.19 on a diluted basis. Moreover, the company has a track record of consistently beating consensus estimates in the last four quarters.
The consensus rating among the 19 analysts covering the stock is a “Moderate Buy.” That’s based on 12 “Strong Buy” ratings, one “Moderate Buy,” and six “Holds.”
This configuration is slightly more bullish than three months ago, with 10 analysts recommending a “Strong Buy,”
On Aug. 7, Scotiabank raised Welltower’s price target from $116 to $121, maintaining an “Outperform” rating on the shares. Following Q2 results, the firm has a mixed outlook on the Real Estate and REITs sector. They believe U.S. REITs' valuation is now in line with the S&P 500. Moreover, strong fundamentals in Senior Housing operations continue to support robust net operating income growth.
While the stock currently trades above the mean price target of $115.53, the Street-high target of $129 suggests an upside potential of 11.3% from the current price level.
On the date of publication, Kritika Sarmah did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
