It has been about a month since the last earnings report for Welltower (WELL). Shares have lost about 0.7% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Welltower due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.

Welltower Q4 FFO Beat Estimates, SHO Occupancy Rises

Welltower’s fourth-quarter 2023 normalized FFO per share of 96 cents surpassed the Zacks Consensus Estimate of 94 cents. The reported figure improved 15.7% year over year.

Results reflect better-than-anticipated revenues. The total SSNOI increased year over year, driven by SSNOI growth in the SHO portfolio. The company issued its guidance for 2024.

Welltower recorded revenues of $1.75 billion in the quarter, outpacing the Zacks Consensus Estimate of $1.71 billion. Moreover, the top line increased 15.2% year over year.

For 2023, the company reported a normalized FFO per share of $3.64, up from the prior year’s $3.35. Moreover, the reported figure surpassed the Zacks Consensus Estimate of $3.61. Total revenues of $6.64 billion improved 13.3% year over year and beat the consensus mark of $6.60 billion.

Quarter in Detail

The SHO portfolio’s same-store revenues increased 9.7% year over year, backed by a 330-basis point uptick in average occupancy.

In the fourth quarter, property operating expenses flared up 10.4% to $1.04 billion year over year.

The company’s total portfolio of SSNOI grew 12.5% year over year, supported by SSNOI growth in its SHO portfolio of 23.7%.

Welltower’s pro-rata gross investments in the fourth quarter totaled $3 billion. This included $2.8 billion in acquisitions and loan funding and $277 million in development funding. It opened 11 development projects for a pro-rata investment amount of $335 million. Welltower also completed pro-rata property dispositions and loan payoffs of $43 million in the quarter.

During the fourth quarter, Welltower acquired properties totaling $968 million (at company’s share) across seniors housing, wellness housing, outpatient medical and long-term/post-acute sectors largely across granular, privately negotiated off-market transactions.

It also acquired a portfolio of ten senior housing communities for $469 million from Kayne Anderson Real Estate. The portfolio, with an average age of 11 years, was acquired at a material discount to replacement cost.