CareTrust REIT (7XC) Q3 2026 Earnings Report

The call was strongly positive. CareTrust reported 20% year-over-year per-share earnings growth, record investment activity, raised 2026 guidance, strong lease coverage, substantial liquidity, low leverage, and a large pipeline led by the strategic LNT relationship. The company also identified higher rates, cap rate compression, tax leakage, uncertain purchase-option timing, and flat share performance as challenges, but management remained confident in its ability to deliver meaningful and potentially double-digit growth.

CareTrust raised the low end of its full year 2026 guidance and now projects normalized FFO per share of $2.08 to $2.09 and normalized FAD per share of $2.04 to $2.05, representing midpoint growth of 18.5% and 16.2%, respectively, based on a weighted average diluted share count of 240 million shares; assumptions include no new investments, loans, or dispositions beyond those made or announced year-to-date, no new debt or equity issuances beyond those made year-to-date, 2.5% inflation-based rent escalators, $147 million of loans to be repaid throughout the year, of which $111 million have been received so far to date, and no material change in the pound sterling to U.S. dollar spot exchange rate. The pipeline is just over $1.2 billion, with roughly 1/2 comprising 21 remaining LNT homes expected to close between January and September, roughly another 20% U.S. SHOP, and the balance skilled nursing, U.K. care homes, and loan activity; later next year, the company expects to begin converting LNT homes to a RIDEA structure by acquiring the opcos at a 20% yield on in-place EBITDA. Management said that, if it utilized available capacity to fund the pipeline, it could be reporting another year of double-digit normalized FFO per share growth by the end of 2027 while keeping pro forma leverage still well below the long-term target range of 4x to 5x, and it continues to underwrite SHOP investments to a low double-digit unlevered IRR, 10-year hold.