UBS has maintained a Buy recommendation on Welltower Inc. (NYSE: WELL) and kept its $228.00 price target following the company’s fourth-quarter 2025 reporting and the release of initial 2026 guidance. The shares were trading at $210.95 at the time of reporting, sitting just above their 52-week high, and the analyst community consensus remains a Buy. Data from InvestingPro indicates the stock is priced above its Fair Value assessment.
Welltower reported a surge in fourth-quarter investment activity, recording $13.9 billion in investments. That outstripped UBS’s internal estimate of $10.5 billion and the sell-side consensus of $9.2 billion, underscoring an active deployment cadence in the quarter. Across the company’s total portfolio, same-store net operating income - SSNOI - grew by 15.0%, a notable contribution to recent financial momentum.
Revenue performance over the most recent twelve months has been particularly strong, with reported revenue up 35.6% year over year. The fourth-quarter top line came in at $3.18 billion, comfortably ahead of the forecasted $2.85 billion, which represented an 11.58% positive surprise versus expectations. Despite the revenue beat, reported earnings per share for the quarter were $0.14, below the anticipated $0.56, a shortfall of 75% relative to analyst projections.
Within Welltower’s operating segments, the Senior Housing Operating Portfolio (SHOP) remained a primary driver. SHOP delivered 20.4% same-store NOI growth in the period. Year-over-year same-store occupancy rose by 400 basis points to 89.5%, while same-store revenue per occupied room (RevPOR) increased 4.7%. These operational metrics underpin management’s confidence in SHOP organic growth and are a central pillar of the 2026 outlook.
The company highlighted a long record of shareholder distributions, noting it has paid dividends for 50 consecutive years. The current dividend yield stands at 1.47%. Liquidity and balance-sheet metrics cited by InvestingPro show the business operating with what the data describes as a moderate debt profile and strong liquidity, with a current ratio of 4.18.
Management provided initial guidance for 2026 that calls for Core Funds From Operations (FFO) growth of 16.6% at the midpoint. The guidance attributes this projected growth to continued SHOP organic expansion in the 15% to 21% range, full-year NOI contributions from the quarter’s and recent investments, and a portfolio mix shift tied to operating margin dispositions that the company expects will add more than 200 basis points to SSNOI.
Analysts covering the company expect continued profitability in 2026, with revenue growth forecasts centered at 32%. At the same time, valuation metrics indicate a premium relative to peers. The company is trading at a next-twelve-month FFO multiple of 32x, which represents a 107% premium to the sector and compares with a five-year average premium of 73%. Additional valuation metrics from InvestingPro show a price-to-earnings ratio of 144.08 and an enterprise value to EBITDA multiple of 62.84, reflecting elevated market pricing for the stock.
These mixed signals - strong investment activity, accelerating SSNOI and revenue growth on one hand, and high valuation multiples and an EPS miss on the other - set up a nuanced picture for investors. The company’s 2026 plan relies on continued SHOP momentum and the performance lift from recent deployments, while market pricing appears to bake in a rich premium for that execution and growth to play out.
Investors and analysts will be watching how the components of the guidance convert into realized cash flow and reported FFO through the year. The interplay between operational progress in senior housing, contributions from newly-deployed capital, and the market’s expectation embedded in current valuation multiples will determine sentiment going forward.
Key points:
- UBS reiterates a Buy rating and $228.00 price target after Welltower’s Q4 2025 results and initial 2026 guidance.
- Q4 saw $13.9 billion in investments and 15.0% same-store NOI growth across the portfolio; SHOP led with 20.4% same-store NOI growth and occupancy up to 89.5%.
- Welltower projects Core FFO growth of 16.6% at the midpoint for 2026, driven by SHOP organic growth, full-year NOI from recent investments, and a portfolio mix shift adding over 200 basis points to SSNOI.
Sectors impacted:
- Health Care Real Estate Investment Trusts (REITs)
- Senior housing and care services
- Real estate capital markets and investors assessing REIT valuations
Risks and uncertainties:
- Elevated valuation multiples: the next-twelve-month FFO multiple of 32x and a P/E of 144.08 suggest the stock is trading at a significant premium to the sector, which could increase sensitivity to execution shortfalls - relevant to equity investors and REIT valuations.
- Quarterly earnings gap: Q4 revenue beat was accompanied by an EPS miss of $0.14 versus $0.56 expected, indicating potential volatility between top-line strength and reported earnings - a concern for earnings-driven equity valuations.
- Guidance execution dependency: 2026 expectations rely on SHOP organic growth of 15% to 21% and NOI contributions from recent investments; failure to convert these assumptions into realized FFO would affect expectations across healthcare REITs and related capital markets.