Yahoo Finance Ventas (VTR) Q1 FFO Beats Estimates on Higher Same-Store NOI
Ventas, Inc. VTR reported first-quarter 2024 normalized funds from operations (FFO) per share of 78 cents, beating the Zacks Consensus Estimate of 74 cents. The reported figure increased 5.4% from the prior-year quarter’s tally.
Results reflect better-than-anticipated revenues. Also, Ventas’ same-store cash net operating income (NOI) increased year over year on strong performance across the portfolio, except for triple-net leased properties. It has also raised its 2024 outlook.
VTR clocked in revenues of $1.20 billion in the first quarter, surpassing the Zacks Consensus Estimate of $1.16 billion. Also, the figure increased 11.4% on a year-over-year basis.
Per Debra A. Cafaro, chairman and CEO of Ventas, “2024 is off to a strong start, led by continued organic growth in our advantaged senior housing operating portfolio (“SHOP”), as we execute against our strategy. Demand-driven accelerating occupancy in SHOP drove our performance in the quarter, as the unprecedented multiyear growth opportunity in senior housing continues to build."
Quarter in Detail
In the reported quarter, same-store cash NOI for the total property portfolio (1,093 assets) increased 6.7% to $441.4 million from the prior-year quarter.
Segment-wise, the same-store cash NOI for the SHOP portfolio (477 assets) climbed 15.2% year over year to $183.4 million, led by the U.S. communities. Revenues per occupied room (RevPOR) growth of 4.7% resulted in a margin expansion of 170 basis points (bps), aiding the rise in the segment’s same-store cash NOI.
The same-store average occupancy expanded 240 bps year over year to 84.6% in the first quarter for the SHOP portfolio.
For the outpatient medical and research portfolio (341 assets), same-store cash NOI improved 4.9% year over year to $129.3 million. The uptick was backed by continued strong performance in the outpatient medical portfolio that witnessed same-store cash NOI growth of more than 4%.
The triple-net leased portfolio’s (275 assets) same-store cash NOI fell 2% year over year to $128.6 million.
Balance Sheet Position
Ventas exited first-quarter 2024 with cash and cash equivalents of $632.4 million, up from $508.8 million as of Dec 31, 2023.
Moreover, it ended the quarter with $3.36 billion of liquidity and a net debt to further adjusted EBITDA ratio of 6.7.
2024 Outlook
Ventas raised its guidance for 2024.
It now expects 2024 normalized FFO per share in the range of $3.10-$3.18, revised from $3.07-$3.18 stated earlier. The Zacks Consensus Estimate for the same is currently pegged at $3.15, which lies within the guided range.
The total same-store cash NOI growth is now estimated between 6% and 8%, up from 5.0-7.5% projected earlier. The SHOP segment's same-store cash NOI is now anticipated to be between 12% and 16%, higher than 10-15% from the prior guidance.
The Outpatient Medical and Research Portfolio segment's same-store cash NOI is now expected in the range of 2.50-3.25% from 2.25-3.25%, while the estimation for triple-net leased same-store cash NOI was changed to 1.25-2.00% from 1-2%.
Ventas currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Ventas, Inc. Price, Consensus and EPS Surprise
Ventas, Inc. price-consensus-eps-surprise-chart | Ventas, Inc. Quote
Performance of Other REITs
Boston Properties Inc.’s BXP first-quarter 2024 funds from operations (FFO) per share of $1.73 was in line with the Zacks Consensus Estimate. The reported figure remained unchanged year over year.
BXP’s quarterly results reflect better-than-anticipated revenues on healthy leasing activity. However, higher interest expenses during the quarter acted as a dampener. BXP also lowered its guidance for 2024 FFO per share.
Healthpeak Properties, Inc. DOC reported first-quarter 2024 FFO as adjusted per share of 45 cents, beating the Zacks Consensus Estimate by a penny. The reported figure rose 7.1% from the prior-year quarter.
Results reflect better-than-anticipated revenues. Moreover, growth in total merger-combined same-store cash (adjusted) NOI was witnessed across the portfolio. The company also revised its 2024 outlook.
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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