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How Does Wall Street Rate Welltower among Healthcare REITs?


Jul. 19 2017, Updated 9:06 a.m. ET

Analysts’ ratings

Welltower’s (HCN) expected performance in 2017 is reflected in analysts’ ratings for its stock. Analysts have given HCN a mean price target of $72.19, implying a dip of 2% from its current level of $73.71.

Currently, six out of the 23 analysts covering HCN have issued “buy” or “strong buy” ratings on the stock. The remaining 14 analysts have given it “hold” ratings, and three analysts have given it “sell” or “strong sell” ratings. The company’s leading presence in the healthcare REIT (real estate investment trust) space is backed by its favorable location in high-barrier, affluent metros.

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Moreover, the company consistently carries out innovations and regularly streamlines its portfolio in order to increase its efficiency of operations. This strategy has made analysts bullish on the stock. However, the company faces short-term earnings dilution as a result of its heavy dispositional activities.

Compared to the ratings issued on the stock in April 2017, the number of its “strong buy” and “buy” ratings has remained the same. However, the number of analysts rating the stock as a “sell” or a “strong sell” has risen from two to three.

HCN’s peer ratings

Among Welltower’s major peers, three out of 21 analysts have given HCP (HCP) “buy” or “strong buy” ratings. Seventeen analysts have given HCP “hold” ratings, and one analyst has given it a “sell” or a “strong sell” rating.

Nine out of the 12 analysts covering Health Trust of America (HTA) have given the company “buy” or “strong buy” ratings. Three analysts have given it “hold” ratings.

Two out of the 20 analysts covering Ventas (VTR) have given it “buy” or “strong buy” ratings. Fourteen analysts have given VTR “hold” ratings, and four analysts have given it “sell” or “strong sell” ratings.

The Vanguard REIT ETF (VNQ), which holds almost 9% in Welltower and its peers, has a market cap–weighted index with a broad product portfolio covering industries such as healthcare, self-storage, and residential REITs. It has a net asset value of $81.2 million.


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