Medical Properties Trust (MPW: NYE) is accelerating its efforts to recover overdue rents and loans from the Steward Health Care System. This move comes as a significant portion of MPW’s revenue is tied to Steward. Steward has failed to pay rent for September and October, with unpaid rent totaling around $50 million as of December 31, 2023, which is over 16% of MPW’s third-quarter revenue.
What Do Analysts Say About Medical Properties Trust:
Medical Properties Trust (MPW: NYE) has been covered by a total of 10 analysts, who have given an average rating of “Sell” with an average target price of $6.9. This contrasts sharply with the sector average analyst rating of “Buy”. The Stock Target Advisor, on the other hand, maintains a “Neutral” rating.
MPW remains uncertain about Steward’s ability to meet all scheduled lease payments over the 22-year term of their master lease. Consequently, MPW is preparing to record a non-cash charge of roughly $225 million in Q4 2023 to write off consolidated straight-line rent receivables.
To expedite recovery, MPW has enlisted financial and legal experts. Meanwhile, MPW’s stock has lost over 53% of its value in the past year. Despite this, analysts maintain a Hold consensus rating, with one Buy, four Hold, and two Sell recommendations. The average price target for MPW stock is $5.71, suggesting a 14.2% upside potential from current levels.
Future Outlook and Market Sentiment:
For the time being, Stock Target Advisor recommends maintaining a “Hold” stance on Medical Properties Trust (MPW: NYE) with a target price of $0, leaving no projected price change in the next 12 months. This recommendation takes into consideration the average analyst target price of $6.90, coupled with an underperform rating. Furthermore, the analysis reflects 7 positive signals and 6 negatives.
Conclusion:
Medical Properties Trust’s (MPW: NYE) recent measures to expedite rent recovery efforts and the anticipated partial payments in Q1 and Q2 of 2024 could potentially boost its current financial metrics. However, its high debt-equity ratio must not be overlooked, and investors should tread cautiously. Further developments in the company’s rent recovery efforts could significantly sway its future outlook.
Muzzammil is a content writer at Stock Target Advisor. He has been writing stock news and analysis at Stock Target Advisor since 2023 and has worked in the financial domain in various roles since 2020. He has previously worked on an equity research firm that analyzed companies listed on the stock markets in the U.S. and Canada and performed fundamental and qualitative analyses of management strength, business strategy, and product/services forecast as indicated by major brokers covering the stock.
