Headquartered in Toledo, Ohio, Welltower Inc. (WELL) is a real estate investment trust (REIT), reshaping health care infrastructure. It partners with top senior housing and healthcare operators to build the infrastructure for cutting-edge care models. With $18.7 billion in market cap, Welltower focuses on high-growth markets across the U.S., Canada, and the U.K., investing in senior housing, post-acute, and outpatient medical properties, improving wellness and care experiences.
Shares of the health care real estate firm have been on a strong upward trajectory over the past 52 weeks, surging 57.7% and exceeding the broader S&P 500 Index’s ($SPX) 30.4% rally. Plus, the stock is up 50.9% in 2024 alone, outshining the SPX’s 23.1% rise on a YTD basis.
Zooming in further, WELL stock has outperformed the Vanguard Real Estate Index Fund ETF Shares (VNQ). The exchange-traded fund has gained 18.2% over the past 52 weeks.
In 2024, Welltower has been riding a wave of success, driven by the booming aging population and a series of solid performances. On Nov. 8, WELL stock hit fresh highs of $140.19, a testament to its growing influence in healthcare real estate. Plus, on Oct. 28, the company declared a $0.67 per share dividend, payable on Nov. 21, marking its 214th consecutive quarterly payout, reassuring investors of its steady income stream.
Shares of Welltower surged 5.2% in the subsequent trading session following its Q3 earnings report on Oct. 28. Its funds from operations (FFO) rose 20.7% year over year to $1.11 per share, exceeding Wall Street’s forecasts by 6.7%, while its revenue of $2.06 billion, up 23.7% year over year, also beat expectations. A standout was the 12.6% total portfolio same-store net operating income (SSNOI) growth, with the senior housing portfolio (SHO) posting a remarkable 23% boost.
On top of that, Welltower raised its 2024 guidance, projecting normalized FFO per share between $4.27 and $4.33, up from earlier forecasts.
For the current fiscal year, ending in December, analysts expect Welltower’s EPS to grow 18.1% to $4.30. The company’s earnings surprise history is impressive. It beat the consensus estimate in each of the last four quarters.
Among the 19 analysts covering WELL stock, the consensus rating is a “Moderate Buy.” That’s based on 11 “Strong Buy” ratings, one “Moderate Buy,” and seven “Holds.”
This configuration has been slightly less bullish, with 12 “Strong Buy” ratings over the past three months.
On Oct. 1, Wells Fargo (WFC) made a subtle shift in its approach to WELL stock. The brokerage firm downgraded the stock from "Overweight" to "Equal-Weight," signaling a more neutral outlook. However, its target price edged up slightly from $134 to $135. Wells Fargo’s analyst coverage shift revealed a preference for Ventas (VTR) over Welltower. Despite the downgrade, it believes Welltower’s Price-to-Earnings-to-Growth Yield (PEGY) ratio still looks more appealing in a variety of scenarios, making it a curious case of balance in its real estate strategy.
Although the stock currently trades above the mean price target of $135.89, the Street-high price target of $190 implies the stock could rally as much as 39.7%.
