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Ventas' (VTR) FFO And Revenues Surpass Estimates In Q1

Published 04/27/2017, 10:04 PM
Updated 07/09/2023, 06:31 AM

Ventas, Inc. (NYSE:VTR) reported first-quarter 2017 normalized funds from operations (FFO) of $1.03 per share. The Zacks Consensus Estimate for FFO per share was $1.02. Normalized FFO per share in the prior-year quarter was $1.04.

Ventas posted revenues of $883.4 million, which beat the Zacks Consensus Estimate of $872.2 million. Further, it compared favorably with the year-ago number of $852.3 million.

Modest NOI Growth

For the first quarter, same-store cash net operating income (NOI) growth for total portfolio (1,175 assets) was 3.9% on a reported basis. Notably, triple net same-store cash NOI grew 4.7%, seniors housing operating portfolio same-store NOI grew 2.9% and medical office building portfolio rose 3.7%.

Notable Portfolio Activity

During the quarter, the company invested more than $1 billion. This included around $130 million purchase of a high-quality life science, research and medical complex in Providence, RI. Also, the company arranged a secured credit facility of a $700 million term loan to finance Ardent Health Services’ acquisition of LHP Hospital Group.

Ventas made the commitment to fund around $80 million of development and redevelopment projects.

During and following the quarter, Ventas sold assets and received final repayment on loans receivable for proceeds of $100 million.

Liquidity

The company has upsized its credit facility and presently it has $2.7 billion borrowing capacity under its revolving credit facility and cash in hand.

2017 Outlook

The company reaffirmed its outlook and expects 2017 normalized FFO per share in the range of $4.12 – $4.18. Also, the company anticipates same-store cash net operating income growth of 1.5–2.5% in 2017.

Further, Ventas expects dispositions of $900 million in 2017.

Our Take

Going forward, we believe that Ventas’ adequate size and scale would help it capitalize on opportunities such as increasing healthcare spending, aging population and a rise in insured individuals. However, stiff competition and a projected rise in interest rates keep us concerned.

Ventas, Inc. Price, Consensus and EPS Surprise

Ventas, Inc. Price, Consensus and EPS Surprise | Ventas, Inc. Quote

Currently, Ventas carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

We now look forward to the earnings releases of GGP Inc. (NYSE:GGP) , Vornado Realty Trust (NYSE:VNO) and HCP, Inc. (NYSE:HCP) , which are expected next week.

Note: All EPS numbers presented in this write up represent funds from operations (FFO) per share. FFO, a widely used metric to gauge the performance of REITs, is obtained after adding depreciation and amortization and other non-cash expenses to net income.

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General Growth Properties, Inc. (GGP): Free Stock Analysis Report

HCP, Inc. (HCP): Free Stock Analysis Report

Ventas, Inc. (VTR): Free Stock Analysis Report

Vornado Realty Trust (VNO): Free Stock Analysis Report

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