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Welltower, Inc. (WELL)
NYSE:WELL
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Welltower
(NYSE:WELL)
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Rating:69Neutral
Price Target:
$228.00
▲(9.52% Upside)
Action:DowngradedDate:02/13/26
The score is driven primarily by improving fundamentals (deleveraging, rising cash generation, and strong revenue growth) and a very constructive earnings outlook with strong 2026 FFO/NOI guidance. Offsetting this are a stretched valuation (very high P/E) and technically extended momentum signals (overbought readings) that increase near-term pullback risk.
Positive Factors
Deleveraging & Liquidity
Welltower's materially lower leverage and large cash balance create durable financial flexibility. A de‑risked capital structure and ample liquidity support continued acquisitions, dispositions and fund activity, while improving resilience to downturns and enabling disciplined capital allocation.
Consistent Cash Generation
Steady growth in operating and free cash flow, with FCF tracking reported earnings, signals high earnings quality and internal funding capacity. This sustained cash generation supports reinvestment, dividends, capital rotation and scaling of capital‑light funds over the medium term.
High-Quality SHOP Momentum
A persistent, strong SHOP operating performance and shift toward higher‑growth senior housing increases organic revenue, occupancy and margin potential. Concentrating portfolio mix into younger, higher‑growth SHOP assets enhances long‑term cash flows and operational returns.
Negative Factors
Margin Volatility
Despite robust revenue growth, 2025 showed a material step‑down in profitability, exposing margin sensitivity. Ongoing volatility in operating margins makes forward FFO less certain, raising execution risk for sustaining payout and funding heavy redeployments over time.
Operational Complexity & CapEx Needs
Welltower's tilt into operationally intensive senior living requires significant management bandwidth and upfront capex to rehabilitate legacy or acquired assets. These persistent investments can compress near‑term returns and consume cash, slowing stabilization and scale benefits.
Underperforming Subsegments
Concentration of growth in SHOP leaves triple‑net and post‑acute pools lagging, with low NOI growth and thin coverage metrics. This segment underperformance creates earnings concentration risk and could weaken overall portfolio cash generation if SHOP momentum moderates.
Welltower (WELL) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$145.54B
Dividend Yield1.51%
Average Volume (3M)3.13M
Price to Earnings (P/E)―
Beta (1Y)0.28
Revenue Growth32.27%
EPS Growth67.00%
CountryUS
Employees685
SectorReal Estate
Sector Strength53
IndustryREIT - Healthcare Facilities
Share Statistics
EPS (TTM)0.14
Shares Outstanding697,752,500
10 Day Avg. Volume3,573,149
30 Day Avg. Volume3,132,755
Financial Highlights & Ratios
PEG Ratio-12.26
Price to Book (P/B)2.93
Price to Sales (P/S)11.58
P/FCF Ratio43.38
Enterprise Value/Market Cap1.12
Enterprise Value/Revenue15.24
Enterprise Value/Gross Profit38.90
Enterprise Value/Ebitda70.36
Forecast
1Y Price Target
$224.15Price Target Upside7.67% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering14
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
Welltower Business Overview & Revenue Model
Company DescriptionWelltower Inc. (NYSE:WELL), an S&P 500 company headquartered in Toledo, Ohio, is driving the transformation of health care infrastructure. The Company invests with leading seniors housing operators, post-acute providers and health systems to fund the real estate infrastructure needed to scale innovative care delivery models and improve people's wellness and overall health care experience. Welltower, a real estate investment trust (REIT), owns interests in properties concentrated in major, high-growth markets in the United States, Canada and the United Kingdom, consisting of seniors housing and post-acute communities and outpatient medical properties.
How the Company Makes MoneyWelltower generates revenue primarily through rental income from its real estate investments in senior housing and healthcare facilities. The company typically enters into long-term leases with experienced operators, ensuring a stable cash flow. Additionally, Welltower may earn revenue from property management fees and financing arrangements with its tenants. Key revenue streams include rental payments, which are often structured with built-in escalations tied to inflation or market rates. The company's strategic partnerships with leading healthcare operators, such as Brookdale Senior Living and ProMedica, enhance its earning potential by ensuring high occupancy rates and operational efficiencies in its facilities. Furthermore, Welltower's focus on acquiring and developing properties in high-demand markets contributes to its long-term financial growth.
Welltower Earnings Call Summary
Earnings Call Date:Feb 10, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:May 04, 2026
Earnings Call Sentiment Positive
The call conveyed a strongly positive operating and strategic momentum: very large revenue and cash-flow growth in 2025, consistent high-single to double-digit same-store NOI and occupancy gains in SHOP, successful capital rotation and fund launches, and meaningful deleveraging and liquidity. The principal risks discussed were operational complexity, integration and capex needs in newer or legacy pools, slower-performing triple-net segments, and heightened competition for SHOP assets. Management emphasized disciplined capital allocation and execution, which mitigates many risks. On balance, the positive operational results, balance sheet progress, and scalable initiatives outweigh the challenges.Q4-2025 Updates
Positive Updates
Strong Revenue, EBITDA and FFO Growth in 2025
Company delivered 36% revenue growth, 32% EBITDA growth, and 22% FFO per share growth for 2025; fourth-quarter net income attributable to common stockholders of $0.14 per diluted share and normalized FFO of $1.45 per diluted share (28.3% YoY growth).
Outstanding Same-Store Operating Performance
Total portfolio same-store NOI growth of 15% in the fourth quarter driven by senior housing operating (SHOP) same-store NOI growth of 20.4% — the thirteenth consecutive quarter with same-store NOI growth >20%.
Organic Revenue and Occupancy Momentum
Organic revenue growth around 10% driven by approximately 400 basis points year-over-year occupancy gains and healthy rate growth; guidance assumes RevPOR growth of ~4.8% and occupancy +350 bps in 2026.
Margin Expansion and Operating Leverage
Operating margins expanded by 270 basis points in Q4; expense per unit growth was very low at 0.8% in Q4, producing significant spread between revenue per occupied room and expense per unit and enabling outsized margin expansion.
Aggressive, Disciplined Capital Rotation
Completed nearly $11 billion of net investment activity in 2025 (primarily high-growth senior housing) funded in large part by sale of outpatient medical business for $7.2 billion (to date ~$5.8 billion closed) and a $1.9 billion gain on sale; sold $1.3 billion skilled nursing portfolio with strong realized returns.
Deleveraging and Strong Liquidity Position
Ended the quarter with net debt to adjusted EBITDA of 3.03x (approximately a half-turn reduction versus 2024) and $5.2 billion of cash on hand plus ~ $3.5 billion of expected disposition proceeds, providing funding for ~ $5.7 billion of near-term investment activity.
Successful Launch of Capital-Light Fund Businesses
Closed Senior Housing Equity Fund One with ~ $2.5 billion of equity commitments (approximately $2.1 billion third-party capital, management fees ~1.35%) and held first close of the Welltower US Senior Housing Credit Fund; equity fund was significantly oversubscribed and ~50% deployed.
Portfolio Renewal and Acquisition Activity
Acquired over 1,000 properties across ~90 transactions in 2025 (175+ under construction or recently delivered); SHOP concentration increased ~12 percentage points to ~70% of in-place NOI, and average SHOP asset age improved to 16 years from 19 years in 2021; started 2026 with ~$5.7 billion of acquisitions and $2.5 billion of additional deals closed or under contract in the first six weeks.
Negative Updates
Operational Complexity and Industry Challenges
Management emphasized senior living is a hard, operationally intensive business requiring substantial transformation; decade-long overhaul continues and some portfolios (e.g., legacy assets) required significant remediation and investment to stabilize operations.
Non-Same-Store Pool Lower Occupancy and Integration Work
Large non-same-store pool (acquisitions still working toward same-store status) is less occupied and heavier in the UK, requiring additional leasing and capital to stabilize — these assets are not meaningful near-term contributors until stabilized.
Triple Net Segment Lagging Relative to SHOP
Senior housing triple net same-store NOI grew only 2.6% in the quarter (trailing twelve-month EBITDAR coverage 1.19x), and long-term post-acute same-store NOI was also 2.6% (EBITDAR coverage 1.53x), highlighting slower-performing subsegments versus SHOP.
Ongoing Capital Expenditure Needs on Certain Portfolios
Some recently acquired portfolios (e.g., Holiday/HC1) were purchased at low basis and require meaningful upfront CapEx to reach target standards; management noted elevated near-term capex needs for specific pools even as average acquired assets are younger.
Competition for SHOP Acquisitions and Potential Return Pressure
Management acknowledged increased competition from other REITs and private funds entering SHOP, which could compress acquisition spreads and require continued discipline; they noted competition mainly from financial buyers focused on cap rates rather than operations.
Compensation and G&A Headwinds to Near-Term FFO
Stock-based compensation of approximately $60 million (~8¢ per share) was cited as a drag to normalized FFO; full-year 2026 guidance includes general administrative expense assumptions (~$265 million midpoint) that modestly offset growth.
Company Guidance
Welltower’s 2026 guidance calls for net income attributable to common stockholders of $3.11–$3.27 per diluted share and normalized FFO of $6.09–$6.25 per diluted share ($6.17 midpoint), an $0.88 per‑share midpoint increase versus 2025 driven by +$0.58 from higher senior housing operating NOI, +$0.30 from investment/financing activity and +$0.02 from higher triple‑net income (net of ~ $0.02 G&A headwind); management assumes G&A ≈ $265M with stock‑based comp ≈ $60M (~8¢ FFO drag). Underlying total portfolio same‑store NOI growth is guided to 11.25%–15.75%, with subsegment ranges: outpatient medical 2%–3%, long‑term post‑acute 2%–3%, senior housing triple net 3%–4%, and senior housing operating 15%–21% (midpoint SHOP drivers: revenue growth ~9% = RevPOR +4.8% and occupancy +350 bps; expense growth ~5.5% implying expense‑per‑unit just under 1.5%). Guidance includes only the $5.7B of closed/announced investments to date; balance‑sheet metrics to note: Q4 net debt/adjusted EBITDA was 3.03x (≈0.5x improvement y/y), cash on hand $5.2B, $9.5B of gross disposition/equity proceeds used to fund $13.8B of investment activity, and management expects to exit 2026 with net debt/EBITDA roughly in line with current levels.Welltower Financial Statement Overview
Summary
Strong multi-year revenue growth and steadily rising operating/free cash flow support the fundamental picture, and leverage has improved materially to a very low level. The main offset is profit-margin volatility, including a notable profitability step-down in 2025 versus 2024.Income Statement
Revenue has expanded strongly over the last several years (2021–2025), including double-digit growth in 2025, showing solid demand and scale. However, profitability has been volatile: net margin fell from a peak in 2020 and improved through 2024 before declining again in 2025, while operating profitability also stepped down meaningfully in 2025 versus prior years. Overall, the top-line trajectory is favorable, but margin consistency is a key weakness.62
Positive
Balance Sheet
Leverage improved materially over time, with debt-to-equity trending down sharply from 2020–2024 and reaching a very low level in 2025, indicating a significantly de-risked capital structure. Equity and asset base have grown, supporting balance-sheet resilience. The main drawback is modest returns on equity in recent years, suggesting profitability is not yet translating into strong shareholder returns.78
Positive
Cash Flow
Operating cash flow and free cash flow have grown steadily from 2021 through 2025, including solid growth in 2025, supporting reinvestment and shareholder-return capacity. Free cash flow has closely tracked net income (near one-to-one across years), indicating earnings quality is generally supported by cash generation. A watch item is that cash flow coverage of earnings was weaker in 2021 and the 2025 coverage figure appears unreliable in the provided data, creating some uncertainty around that specific point.74
Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 10.67B | 7.85B | 6.48B | 5.78B | 4.71B |
| Gross Profit | 4.18B | 3.02B | 2.53B | 2.22B | 1.93B |
| EBITDA | 2.31B | 2.78B | 2.40B | 2.04B | 1.71B |
| Net Income | 936.85M | 951.68M | 340.09M | 141.21M | 336.14M |
Balance Sheet | |||||
| Total Assets | 67.30B | 51.04B | 44.01B | 37.89B | 34.91B |
| Cash, Cash Equivalents and Short-Term Investments | 5.03B | 3.51B | 1.99B | 631.68M | 269.26M |
| Total Debt | 21.38B | 16.76B | 16.12B | 14.96B | 14.68B |
| Total Liabilities | 24.10B | 18.47B | 17.64B | 16.50B | 15.91B |
| Stockholders Equity | 42.13B | 31.96B | 25.40B | 20.29B | 17.64B |
Cash Flow | |||||
| Free Cash Flow | 2.85B | 2.20B | 1.55B | 1.30B | 1.26B |
| Operating Cash Flow | 2.88B | 2.26B | 1.60B | 1.33B | 1.28B |
| Investing Cash Flow | -10.51B | -5.51B | -5.71B | -3.70B | -4.52B |
| Financing Cash Flow | 9.00B | 4.91B | 5.45B | 2.76B | 1.57B |
Welltower Technical Analysis
Positive
208.19
Price Trends
191.00
Positive
188.23
Positive
173.07
Positive
Market Momentum
6.04
Negative
66.79
Neutral
66.68
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For WELL, the sentiment is Positive. The current price of 208.19 is above the 20-day moving average (MA) of 196.06, above the 50-day MA of 191.00, and above the 200-day MA of 173.07, indicating a bullish trend. The MACD of 6.04 indicates Negative momentum. The RSI at 66.79 is Neutral, neither overbought nor oversold. The STOCH value of 66.68 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for WELL.
Welltower Risk Analysis
Welltower disclosed 45 risk factors in its most recent earnings report. Welltower reported the most risks in the "Legal & Regulatory" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Welltower Peers Comparison
UnderperformOutperform
Sector (65)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
79 Outperform | $8.97B | 25.62 | 9.21% | 3.56% | 59.25% | 88.37% | |
74 Outperform | $13.81B | 24.10 | 11.79% | 6.11% | 13.50% | 31.56% | |
70 Outperform | $5.05B | 31.47 | 5.59% | 6.47% | 8.12% | 75.95% | |
69 Neutral | $145.54B | -293.34 | 2.53% | 1.51% | 32.27% | 67.00% | |
66 Neutral | $41.70B | 157.78 | 2.16% | 2.45% | 15.69% | ― | |
65 Neutral | $2.17B | 12.19 | 3.79% | 4.94% | 3.15% | 1.96% | |
53 Neutral | $12.19B | 169.00 | 0.89% | 7.73% | 9.58% | -111.99% |
* Real Estate Sector Average
WELL
Welltower
208.19
60.15
40.63%
DOC
Healthpeak Properties
16.99
-1.62
-8.69%
OHI
Omega Healthcare
46.57
12.97
38.60%
SBRA
Sabra Healthcare REIT
19.93
5.04
33.88%
VTR
Ventas
85.94
19.63
29.60%
CTRE
CareTrust REIT
40.05
15.81
65.22%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.