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Welltower rises 1.4% ahead of results that beat profit estimates
Welltower shares rose 1.4% in regular trading before the company reported after the 4 p.m. close. Quarterly earnings per share beat analyst estimates while sales fell just short, a mixed result that could move the stock in the next session.
At Monday’s close: S&P 500 +0.70%, Nasdaq-100 +1.09%, Dow +0.28%
Quick Read
- Welltower shares rose 1.4% in regular trading on Monday, before the company released its results.
- Quarterly earnings per share beat the analyst consensus by a wide margin, but sales came in slightly below it.
- Regular trading on Oct. 27 may show the market's response to the report, with the Federal Reserve's rate decision due Oct. 28.
What happened to Welltower shares on Monday?
Welltower (NYSE: WELL) shares rose 1.4% on Monday, Oct. 26, to close at $240.55. The stock had ended the previous session at $237.32.
Why it matters: The gain added $1.4 billion to the company's market value, which now stands near $110 billion. Trading in the shares totaled $390 million during the session.
By the numbers: The move came before the company released its results. The broader market also rose, with the S&P 500 up 0.7%. The real estate sector fund rose 0.5%.
What did Welltower report after the close?
Welltower released its quarterly results after the 4 p.m. close. Earnings per share measure the company's profit divided by its number of shares. That figure came in well above the consensus, the average analyst forecast. That forecast works as the bar to beat.
Sales told a different story. They fell just short of the consensus, missing by a narrow margin.
Profit and sales were each higher than in the same quarter a year earlier, according to the reported results. The report's headline describes the profit measure as funds from operations, a figure real estate companies commonly use to show earnings from their properties.
Why might a mixed quarter matter for the stock?
A profit beat and a sales miss can pull a stock in opposite directions. In this case the profit gap was wide. The sales gap was small.
The closing price does not yet reflect the report, since the shares moved before its release. The reported results do not explain what drove the size of the profit beat. Traders may weigh whether that gain can repeat.
The stock still sits 4.6% below its 52-week high of $252.07. A $1,000 stake bought a year ago would now be worth $1,352.
What comes next for Welltower and the market?
What’s next: Regular trading on Oct. 27 could show how the market prices the report. The Conference Board's consumer confidence index is due the same day at 10 a.m. ET.
The Federal Reserve announces its interest-rate decision on Oct. 28 at 2 p.m. ET, followed by the chair's press conference. Real estate stocks often react to interest-rate news. The 10-year Treasury yield was little changed on Monday at 5.00%.
The government's GDP report and the personal income and spending data follow on Oct. 29 at 8:30 a.m. ET.
For readers
What it could mean for you: People who own Welltower shares directly carry the full effect of this report, with no other holdings to offset it. The wide profit beat and the narrow sales miss could pull the price in different directions when regular trading resumes on Oct. 27. Any reaction may also mix with the Fed's rate decision on Oct. 28, since real estate stocks often respond to interest-rate news. Owners of a real estate sector fund may feel a smaller share of the move, because Welltower is only part of such a fund.
Questions and answers
Did Welltower beat analyst earnings estimates?
Yes on profit. Quarterly earnings per share came in well above the average analyst forecast. Sales fell just short of the consensus.
Why did Welltower stock rise on Oct. 26?
The shares rose 1.4% in regular trading, before the results came out after the close. The broader market also rose that day, with the S&P 500 up 0.7%.
How might Welltower stock react to its earnings?
The report came after the 4 p.m. close, so Monday's closing price does not reflect it. Regular trading on Oct. 27 is when the full market can respond.
The numbers
| Welltower (WELL) price | $240.55 |
|---|---|
| Welltower (WELL) change | +1.36% |
| Welltower (WELL) market value | $110 billion |
| Welltower (WELL) 52-week high | $252.07 |
| S&P 500 change | +0.70% |
| 10-year Treasury yield | 5.00% |
Monday’s close
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The WallStreetDigest daily arrives at 6:15 a.m. ET every trading day.
Not investment advice.