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.
