Wednesday, Scotiabank updated its price target on shares of Welltower Inc. (NYSE:WELL), a real estate investment trust, raising it to $110 from $108, while keeping a Sector Outperform rating on the stock. This adjustment follows Welltower's recent announcement of over $1.0 billion in new investment agreements since April 29, 2024, in addition to the $2.8 billion already closed or under contract for the year to date as of the June business update.
The bank's analyst cited the inclusion of these new investments and an increased year-over-year growth estimate for Same-Store Operating Performance (SHOP) occupancy in 2025 as key reasons for the revised price target. The updated 2024 and 2025 Funds From Operations Per Share (FFOPS) are now projected to be $4.08 and $4.56, rising from the previous estimates of $4.07 and $4.49, respectively.
Adjusted Funds From Operations Per Share (AFFOPS) estimates for Welltower have also seen an uptick, with the 2024 forecast now at $3.59, up from $3.58, and the 2025 estimate increasing to $4.09 from $4.01. These figures reflect the company's solid performance and anticipated growth.
The new price target of $110 is based on a 27.0 times multiple of the estimated 2025 AFFOPS, as outlined by Scotiabank. This valuation reflects a positive outlook on Welltower's financial prospects and market position.
Welltower's stock price target increase signifies Scotiabank's confidence in the company's investment strategy and its ability to generate growth in the coming years. The maintained Sector Outperform rating suggests that Welltower is expected to continue outperforming relative to the sector.
In other recent news, Welltower Inc., a real estate investment trust, has seen several positive adjustments to its price targets and ratings from financial institutions. Citi raised its price target for Welltower to $120, up from $110, maintaining a Buy rating. Simultaneously, the company's estimated normalized Funds From Operations (FFOps) for 2024 and 2025 were revised upwards, reflecting a positive outlook on Welltower's future financial position.
Mizuho Securities also demonstrated confidence in Welltower by raising its price target to $105, up from $98, and retaining a Buy rating on the stock. Meanwhile, RBC Capital Markets increased its price target on Welltower shares to $101, maintaining a Sector Perform rating.
Welltower has also updated its financial outlook for 2024, anticipating an increase in normalized Funds From Operations (FFO) per diluted share. This adjustment reflects the company's confidence in its operational performance and strategic initiatives. Furthermore, Welltower reported robust growth in FFO per share in the first quarter of 2024, alongside a 25.5% increase in same-store net operating income (NOI).
InvestingPro Insights
In light of Scotiabank's updated price target for Welltower Inc. (NYSE:WELL), current InvestingPro data and tips provide additional context for investors considering the company's stock. The market capitalization of Welltower stands at a robust $61.86 billion, reflecting its significant presence in the market. Additionally, the company's revenue has shown impressive growth over the last twelve months as of Q1 2024, with an increase of 16.14%, signaling strong operational performance.
InvestingPro Tips highlight that Welltower is expected to see net income growth this year and analysts are anticipating sales growth in the current year. These projections align with the positive outlook presented by Scotiabank. Furthermore, Welltower has maintained dividend payments for 49 consecutive years, which may be particularly appealing to income-focused investors. The company's dividend yield as of mid-2024 stands at 2.36%, with the last dividend ex-date reported on May 10, 2024.
For those seeking more in-depth analysis, InvestingPro offers additional tips for Welltower, which can be found at https://www.investing.com/pro/WELL. Interested readers can take advantage of an exclusive offer using the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, providing access to an extensive range of financial tools and insights.
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