Analyst Note| Kevin Brown, CFA |
Third-quarter results for Ventas were slightly below our expectations, though we don't believe anything from the quarter will materially change our $69 fair value estimate for the no-moat company. Senior housing occupancy improved 80 basis points sequentially and is up 260 basis points year over year to 84.7%, in line with our estimate. While same-store revenue growth of 8.7% for the senior housing portfolio matched our estimate of 8.9%, same-store expense growth of 7.6% was slightly higher than our estimate of 4.6%. As a result, Ventas reported same-store net operating income growth of 13.0% that was below our estimate of 19.0% growth. Ventas also reported that same-store NOI was down 0.1% for the triple-net senior housing portfolio, worse than our estimate of 2.5% growth. However, results for the life science and medical office segments were slightly better than we anticipated, with same-store NOI growth of 3.4% for life science that beat our 2.6% estimate and same-store NOI growth of 1.5% for medical office that beat our 1.1% estimate. Combined, Ventas reported same-store NOI growth of 4.8% for the total company that was below our estimate of 7.5%, which led to the company reporting normalized funds from operations of $0.76 per share, which is $0.03 better than the $0.73 figure reported in the third quarter of 2021.