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On Friday, RBC Capital Markets analyst Michael Carroll upgraded Welltower Inc. (NYSE:WELL) stock rating from Sector Perform to Outperform and increased the price target to $168 from $146. Carroll cited Welltower’s continued solid growth prospects, underpinned by robust fundamentals and an attractive investment landscape. The upgrade comes as Welltower demonstrates impressive momentum, with a 68.5% return over the past year and trading near its 52-week high of $152.81.
The analyst noted that Welltower’s recent initiatives, such as the launch of its fund business and the rollout of its technology platform, are expected to contribute positively to the company’s long-term performance. The fund business is anticipated to broaden the company’s ability to engage in a more diverse range of deals. According to InvestingPro data, the company’s strong execution is reflected in its 21.58% revenue growth and healthy current ratio of 2.22, indicating solid operational efficiency.
Carroll also pointed out that the new technology platform is likely to enhance operational efficiencies across Welltower’s portfolio and support future transactions. Based on these factors, RBC Capital Markets sees a stronger growth outlook for the company. InvestingPro analysis reveals multiple positive indicators for Welltower, with 15+ additional ProTips available to subscribers, covering everything from valuation metrics to growth prospects.
The new price target of $168 per share reflects an increase in the applied multiple from 29.5x to 32.5x. This adjustment is attributed to the anticipated acceleration in growth, as detailed by the analyst in his commentary.
Welltower, a real estate investment trust, specializes in health care infrastructure and has been making strides in expanding its business operations and technological capabilities to maintain its competitive edge in the market. The company has maintained dividend payments for 50 consecutive years, demonstrating its commitment to shareholder returns while operating with a moderate level of debt.
In other recent news, Welltower Inc. reported mixed fourth-quarter 2024 results. The company posted adjusted earnings per share of $0.19, which fell short of the consensus estimate of $0.41. However, Welltower’s revenue for the quarter exceeded expectations, coming in at $2.25 billion compared to the anticipated $2.12 billion. The company also reported a 17.7% year-over-year increase in normalized funds from operations per share, reaching $1.13. Despite strong performance in 2024, Welltower issued softer-than-expected guidance for 2025, forecasting earnings per share between $1.60 and $1.76, below the consensus estimate of $1.86. In other developments, BofA Securities analyst Joshua Dennerlein raised the price target for Welltower to $242 from $221, maintaining a Buy rating on the stock. The analyst highlighted Welltower’s strategic moves and competitive edge, which are expected to drive superior results. Additionally, Welltower’s board approved a 10% increase in the quarterly dividend, signaling confidence in the company’s growth prospects.
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