HCP, Inc (
, a real estate investment trust (REIT), is scheduled to report
its third quarter 2012 earnings on October 30. The current
Zacks Consensus Estimate for the third quarter is pegged at 69
cents per share, representing a year-over-year growth of about
HEALTH CR REIT (HCN): Free Stock Analysis
HCP INC (HCP): Free Stock Analysis Report
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Second Quarter Recap
HCP reported second quarter 2012 FFO (funds from operations) of
$293.6 million or 69 cents per share compared with $317.9 million
or 78 cents per share in the year-earlier quarter.
Excluding non-recurring items, FFO for the reported quarter was
$293.6 million or 69 cents per share compared with $312.2 million
or 77 cents per share in the year-ago quarter. Recurring FFO per
share in the quarter beat the Zacks Consensus Estimate by a
HCP reported total revenue of $464.4 million during the quarter
compared with $488.1 million in the year-ago period. Total
revenue in the reported quarter missed the Zacks Consensus
Estimate of $469.0 million.
Agreement of Analysts
In the last 7 days, none of the analysts have revised their
earnings estimates upward for 2012, while only one have revised
it down. For 2013, one analyst have revised the earnings
estimates upward in the last seven days while none moved in the
opposite direction. This signifies that the analysts are cautious
about both the short- and long-term earnings prospect of the
Magnitude of Estimate Revisions
For full-year 2012, the company expects FFO in the range of $2.73
to $2.79 per share. The Zacks Consensus Estimates for 2012 have
remained constant over the last 7 days at $2.76 per share, which
is at the middle of the company's guidance. For 2013, the Zacks
Consensus Estimate has increased in the last 7 days by a
penny to $2.97.
HCP is a leading medical REIT in the U.S. with one of the largest
and most diversified portfolios in the healthcare sector with
exposure to all types of facilities. The product diversity of the
company allows it to capitalize on opportunities in different
markets based on individual market dynamics, and provides a
competitive advantage over its peers.
In addition, healthcare is relatively immune to the economic
problems faced by office, retail and apartment companies.
Consumers will continue to spend on healthcare while cutting out
discretionary purchases. The healthcare industry is the single
largest industry in the U.S., based on Gross Domestic Product
(GDP), and offers stability to the company amidst the volatility
in the market.
However, a large portion of HCP's revenue originates from a few
tenants, which exposes it to concentration risk. If one of the
company's larger tenants runs into financial difficulty, earnings
could be negatively affected.
HCP currently retains a Zacks #3 Rank, which translates into a
short-term Hold rating. We are also maintaining our long-term
Neutral recommendation on the stock. One of its competitors,
Health Care REIT, Inc (
also holds a Zacks #3 Rank.