Interactive Brokers shares jump as it secures spot in S&P 500
Welltower Inc. (NYSE:WELL), a prominent $98.5 billion market cap real estate investment trust (REIT) specializing in health care infrastructure, announced today an equity distribution agreement enabling the company to offer and sell shares worth up to $7.5 billion. According to InvestingPro data, the company boasts an impressive 50-year track record of consistent dividend payments and maintains a strong financial health score of "GOOD." The agreement, effective today, involves Welltower and a consortium of financial institutions acting as sales agents and forward sellers.
The offering, known as an at-the-market (ATM) offering, allows Welltower to sell common stock from time to time through the sales agents. The sales may occur on the New York Stock Exchange or other available markets at prevailing market prices or through negotiated transactions.
The ATM offering also includes provisions for forward sale agreements, where the forward sellers, on behalf of Welltower, may borrow and sell shares to manage the company’s exposure to market fluctuations. Welltower will not initially receive proceeds from these borrowed shares but expects to settle the agreements in cash or shares at a later date, depending on the company’s choice of settlement method. The company’s strong liquidity position is evidenced by its healthy current ratio of 2.22, indicating robust ability to meet short-term obligations.
This strategic move follows the termination of a prior equity distribution agreement dated October 29, 2024. The new offering is registered under Welltower’s automatic shelf registration statement on Form S-3, as per the prospectus supplement filed with the Securities and Exchange Commission (SEC) today.
In addition to the ATM offering, Welltower filed other prospectus supplements related to exchangeable senior notes and DownREIT units. These supplements continue the offerings covered under previous registrations, indicating potential future conversions or redemptions that could lead to the issuance of common stock.
The company also registered the resale of over 1.5 million shares of common stock issued as consideration for recent property acquisitions. This filing is part of an ongoing effort to provide legal and tax opinions regarding the various shares involved in Welltower’s financial maneuvers.
Investors and market watchers will be closely monitoring the impact of this significant capital-raising initiative on Welltower’s financial position and its ability to expand or enhance its health care property portfolio. The company has demonstrated strong performance with 21.58% revenue growth in the last twelve months, though current market analysis suggests the stock may be trading above its Fair Value. For deeper insights into Welltower’s valuation and growth prospects, investors can access comprehensive analysis and 14 additional key insights through InvestingPro’s detailed research reports, available as part of their coverage of 1,400+ top US stocks.
In other recent news, Welltower Inc. reported mixed results for the fourth quarter of 2024, with earnings per share at $0.19, missing the consensus estimate of $0.41. However, the company exceeded revenue expectations, posting $2.25 billion against the anticipated $2.12 billion. Welltower’s normalized funds from operations (FFO) per share increased by 17.7% year-over-year to $1.13, with strong same-store net operating income growth of 12.8%. Looking forward, the company issued guidance for 2025 with projected earnings per share ranging from $1.60 to $1.76, which is below the consensus estimate of $1.86.
Additionally, S&P Global Ratings upgraded Welltower’s credit rating to ’A-’ from ’BBB+’, citing strong operating performance and reduced leverage. Analysts from Evercore ISI and RBC Capital have also adjusted their outlooks. Evercore ISI raised its price target to $145, reflecting positive impacts from Welltower’s acquisition of the Amica Senior Lifestyles portfolio. Meanwhile, RBC Capital upgraded the stock rating to Outperform and increased the price target to $168, highlighting Welltower’s solid growth prospects and operational initiatives. Furthermore, BofA Securities set a new price target of $242, maintaining a Buy rating, emphasizing Welltower’s strategic positioning and industry potential.
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