Welltower Is Having A Strong Month After Impressive Q3 Earnings

A major real estate investment trust (REIT) headed higher on Nov. 8, after reporting third-quarter funds from operation (FFO) met expectations and revenues beat them. Welltower Inc. WELL gained substantially on the news that the company had a quarterly FFO of $0.84 per share, better than the year-ago figure of $0.80%.

The REIT’s third-quarter revenue came in at $1.47 billion, a better than 18% increase over the previous year’s results. From headquarters in Toledo, Ohio, Welltower operates healthcare facilities, including senior housing, post-acute care and health systems.

After opening up by more than 11%, the REIT cooled down during the trading session and managed to hold on to an 8.8% gain for the day. The REIT has since held onto most of those gains and is now up 12.86% for the month. 

Welltower has a market capitalization of $31.3 billion, which puts it in the “major” group of real estate investment trusts. The average daily volume for the big healthcare REIT is 2.67 million shares.

Credit Suisse analysts on Nov. 1 reiterated their outperform rating for the company with a price target reduced from $100 to $75. Raymond James analysts recently downgraded their opinion of Welltower from strong buy to outperform with a price target downsized from $81 to $70.

The REIT continues to pay a 3.67% dividend.

Welltower’s daily price chart is here:

The gap up in price takes it above the declining 50-day moving average, a bullish-looking move for the REIT. The heavier-than-usual volume is also a good sign, a confirmation of the strength of the move. 

This is the weekly chart:

Welltower has a long way to go to regain the kind of upward momentum seen in 2021 and the beginning of this year. It’s a highly visible bounce off of the September/October lows, a better look right now than most other names in the real estate investment group.

REITs such as this one will be deeply affected by the Federal Reserve’s decisions on interest rate hikes, with concerns about how much higher they’ll rise and for how long. Investors will be looking for clues with the latest consumer price index reading, released on Nov. 10 for the month of October.

REITs are one of the most misunderstood investment options, making it difficult for investors to spot incredible opportunities until it’s too late. Benzinga’s in-house real estate research team has been working hard to identify the greatest opportunities in today’s market, which you can gain access to for free by signing up for Benzinga’s Weekly REIT Report.

Charts courtesy of StockCharts