Elevating Investments in Senior Housing Boosts Welltower’s Q3 Normalized FFO

Welltower (NYSE:WELL) has raised its full-year guidance following robust growth in its senior housing portfolio, which contributed to the company’s impressive performance in Q3 normalized funds from operations (FFO).

With its senior housing investments proving to be strong revenue drivers, Welltower now anticipates a 2023 normalized FFO per share of $3.59-$3.63, surpassing the consensus estimate of $3.55. This revised guidance marks a significant increase from the previous projection of $3.51-$3.60.

In Q3, Welltower achieved a normalized FFO per share of $0.92, outperforming analysts’ average estimate of $0.89. This figure demonstrates steady growth from the previous quarter’s $0.90 and the year-ago quarter’s $0.84.

Despite revenue slightly dipping to $1.66 billion from $1.67 billion in Q2, Welltower still exceeded the consensus estimate of $1.63 billion. Furthermore, the Q3 revenue showed significant progress compared to the $1.47 billion generated during the same period last year.

However, the after-hours trading saw Welltower’s stock experience a modest decline of 1.1%.

Impressive Growth in Same-Store Net Operating Income (SSNOI)

Welltower’s total portfolio same-store net operating income (SSNOI) recorded a remarkable 14.1% year-over-year growth, surpassing the previous quarter’s growth rate of 12.7%. Specifically, SSNOI for the seniors housing operating portfolio increased by 26.1% compared to 24.2% in Q2.

Most notably, the seniors housing operating (SHO) portfolio witnessed a 330 basis points expansion in SSNOI margin. This growth can be attributed mainly to the substantial revenue per occupied room increase, which consistently outpaced expense per occupied room growth.

Investor Conference Call and Future Outlook

Welltower is scheduled to host a conference call on October 31 at 9:00 a.m. ET, allowing investors and analysts to gain further insights into the company’s impressive Q3 results and its future outlook.

In summary, Welltower’s robust performance in Q3, driven by its investments in the senior housing sector, has exceeded expectations. With the raise in guidance for 2023, the company demonstrates its commitment to delivering strong returns and capitalizing on the growing demand for senior housing.

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– Seeking Alpha