Key Takeaways
- Welltower shares fell 5.2% today, even though third-quarter normalized FFO of $1.67 a share beat the $1.64 consensus and the company raised its 2026 outlook.
- The stock rose in early premarket trading before falling in the regular session. On the call, management said the economy has kept getting worse but that it sees more deals as sellers struggle with financing.
- The business is still growing fast: same-store NOI in senior housing rose 21.0%, and the new guidance would mean 23% FFO growth for 2026.
- At about 37x forward AFFO, against a five-year average of 30x, the stock leaves little room for error as rates rise.
Welltower (WELL) shares sank 5.2% today, even after the senior-housing REIT beat on FFO and raised its 2026 outlook for the third time this year.
The stock rose in early premarket trading before falling in the regular session. On the call, management described a worsening economy but said demand stayed resilient and tighter financing is creating chances to buy. Revenue also came in slightly below some forecasts.
What Welltower Reported
Welltower reported third-quarter results after Monday’s close:
- Normalized FFO of $1.67 a share, up 24.6% from a year earlier and ahead of the $1.64 consensus
- Revenue of $3.72 billion, up 38%, a touch below the $3.75 billion some analysts expected
- Same-store NOI up 21.0% in its senior housing operating portfolio
- Full-year normalized FFO guidance raised to $6.47 to $6.53 a share, from $6.36 to $6.44
The new $6.50 midpoint would mean 23% growth over 2025.
TIKR Tracks 22 Analysts on Welltower. How Many Say “Buy”?
See the full breakdown of Buy, Hold, and Sell ratings on Welltower, along with Wall Street’s revenue and earnings estimates, all in one place. More than 500,000 investors use TIKR to research stocks like this one. See Welltower’s Analyst Ratings
What Welltower Said About the Economy
Co-President and Chief Investment Officer Nikhil Chaudhri said on the call that “the macroeconomic environment has continued to deteriorate,” weeks after the Fed raised rates in September for the first time since 2023. He framed that as an opening: owners facing the 2027 maturity wall must “recapitalize or sell,” and Welltower’s deal activity is expanding. Other senior-housing REITs slipped today too.
Growth isn’t in doubt. Analysts expect plenty more of it, and Welltower has closed or agreed to $7.7 billion of deals since the quarter ended:
The price is the harder question. Welltower ended Monday at 39x forward AFFO, against a five-year average of 30x and a July peak of 44x:
After today’s drop, it’s closer to 37x. That’s still a rich multiple with rates heading higher.
Welltower’s Pricing Power Is the Next Test
The business itself looks great. Vice Chairman and Chief Operating Officer John Burkart said occupancy is handing off to rate as the main growth driver. Communities above 90% occupancy, nearly two-thirds of the portfolio, grew revenue per occupied room more than 6%, and as Burkart put it, the extra revenue from higher rates “carries essentially no associated cost.”
The valuation is what leaves Welltower exposed, in my view, even with strong growth and a third guidance raise. At well above its usual multiple with rates rising, it isn’t a bargain yet. I’d want to see rate growth hold above 6% at those full communities before buying, and fourth-quarter results early next year are the next read on it.
So what is Welltower stock actually worth?
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any of the stocks mentioned. Thank you for reading, and happy investing!
