Investing.com -- Shares of Welltower (NYSE:WELL) climbed 3.7% Friday as BofA Securities analyst raised the company’s price target from $190 to a Street High of $221, citing significant long-term value in Welltower’s core business, particularly in senior housing. The firm highlighted three key value drivers: the demographic trend of an aging population, Welltower’s operational platform, and the potential for the company to monetize its AI-driven real estate technology platform, WellGPT.
The analyst’s endorsement of Welltower’s innovative use of artificial intelligence in real estate has contributed to the positive market reaction. WellGPT, a narrow AI developed by Welltower, has been praised for its ability to enhance real estate investment decisions, expedite underwriting processes, and improve the overall product for residents. The platform was first introduced to investors during a 2018 investor day, focusing on its capability to "scale the unscalable" and drive better outcomes across the portfolio.
In a statement, Analyst Joshua Dennerlein said, "WELL is leading the arms race for AI usage in real estate." This acknowledgment of Welltower’s technological advancements has further bolstered investor confidence.
The firm’s analysis suggests that Welltower’s technology platform could be the driving force behind the company’s future growth, drawing parallels to historical instances where companies have outperformed due to management’s focus on innovative strategies. The report outlines several potential ways for Welltower to monetize WellGPT, emphasizing the importance of maximizing cash flow growth, sustaining long-term growth, and avoiding competition with the core business.
Investors have responded positively to the potential for Welltower to leverage its AI technology beyond its current scope, recognizing the added value it could bring to the company’s portfolio. This development, coupled with the aging demographic trend and Welltower’s operational efficiency, has set the stage for the company’s stock movement in today’s trading session.
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