) is set to report its first-quarter 2014 results on May 6, 2014,
before the opening bell. In the prior quarter, it delivered a
positive earnings surprise of 2.70%. Also, this healthcare real
estate investment trust (REIT) has posted an average positive
earnings surprise of 1.35% over the past four quarters, beating
the Zacks Consensus Estimate in 3 of the last 4 quarters.
Let's see how things are shaping up for this announcement.
Factors to Consider
Improving fundamentals in the healthcare REIT market, a
well-balanced, diversified portfolio, opportunistic acquisitions
along with a decent balance sheet place HCP on the growth
trajectory. Specifically, the implementation of the Affordable
Care Act and the associated increase in healthcare spends as well
as the aging population, provide ample opportunity for HCP, which
offers real estates supporting healthcare facilities, to grow and
However, for a number of its tenants and operators, one of the
key sources of revenues is the governmental healthcare programs
such as the Federal Medicare program and state Medicaid programs
and non-governmental payors. This is a concern as in the recent
years governmental payors have reduced payments to healthcare
providers due to budgetary pressures. Also, cut-throat
competition remains a challenge for this company.
Our proven model does not conclusively shows that HCP is likely
to beat the Zacks Consensus Estimate in the upcoming quarter.
To beat the estimate, a stock needs to have both a positive
and a Zacks Rank #1, 2 or 3. We caution against stocks with Zacks
Ranks #4 and 5 (Sell-rated stocks) going into the earnings
announcement, especially when the company is seeing negative
estimate revisions momentum.
Zacks ESP: The Earnings ESP for HCP is 0.00%. This is
because both the Most Accurate estimate and the Zacks Consensus
Estimate stand at 74 cents per share.
Zacks Rank: HCP's Zacks Rank #3 (Hold) increases the predictive
power of ESP. Nevertheless, we need to have a positive ESP as
well to be confident about an earnings surprise call.
Other Stocks to Consider
Here are some other REITs you may want to consider on the basis
of our model, which shows that they have the right combination of
elements to post an earnings beat this quarter. All of these
companies are slated to report on May 7.
Strategic Hotels & Resorts, Inc.
), with an Earnings ESP of +83.3% and a Zacks Rank #2.
Regency Centers Corporation
), with an Earnings ESP of +1.54% and a Zacks Rank #3.
Kimco Realty Corp.
), with an Earnings ESP of +2.94% and a Zacks Rank #3.
STRATEGIC HOTEL (BEE): Free Stock Analysis
HCP INC (HCP): Free Stock Analysis Report
KIMCO REALTY CO (KIM): Free Stock Analysis
REGENCY CTRS CP (REG): Free Stock Analysis
To read this article on Zacks.com click here.