Colliers Securities upgraded Medical Properties Trust, Inc. (NYSE:MPW) stock to a Buy rating and announced a $6.5 price goal.
Also, Truist Securities analyst Michael Lewis raised its price goal from $5 to $6 while maintaining the Hold rating.
On Wednesday, the medical REIT disclosed a world settlement with tenant Steward Health Care System, its secured lenders, and the Unsecured Creditors Committee.
The settlement covers 23 hospitals previously managed by Steward, with 15 hospitals in Arizona, Florida, Louisiana, Ohio, and Texas already leased to latest tenants.
Medical Properties Trust anticipates receiving annual money rental payments of about $160 million from the brand latest leases, based on a $2 billion lease base, upon stabilization throughout the fourth quarter of 2026.
The analyst writes that they’re adjusting the FFO estimates and price goal and affirming a Hold rating as a consequence of anticipated earnings dilution from refinancing activities over the next few years.
Medical Properties Trust agreed to sell three Space Coast hospitals, with a superb portion of the proceeds transferred to Steward. Lewis says that these hospitals, combined with the nine in Massachusetts where Medical Properties Trust recovers nothing, suggest a 75% recovery rate of the $3.2 billion asset value reported in Medical Properties Trust’s first quarter supplemental package.
This estimate assumes Medical Properties Trust recovers $300 million from the six closed hospitals, $100 million from the two under construction, and $2 billion from the 15 transitioned, adds the analyst.
Lewis writes that while this aligns with their previous models, there’s some risk as a consequence of uncertainties about non-operating asset values and the success rates of recent operators.
The analyst revised the 2025 FFO estimate to $1.01 per share from $1.02 per share, still above the $0.92 consensus. The estimates indicate a 39.9% year-over-year decline in normalized FFO per share in 2024, followed by 6.0% growth in 2025.
The analyst projects declining FFO per share in each subsequent 12 months through 2029 as a consequence of dilutive debt refinancing.
Also Read: European Central Bank Cuts Key Interest Rates As Inflation Cools
Price Motion: MPW shares are up 12.4% at $6.295 on the last check Friday.
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Latest Rankings for MPW
|
Date |
Firm |
Motion |
From |
To |
|---|---|---|---|---|
|
Mar 2022 |
B of A Securities |
Downgrades |
Buy |
Neutral |
|
Feb 2022 |
Credit Suisse |
Maintains |
Outperform |
|
|
Feb 2022 |
Credit Suisse |
Initiates Coverage On |
Outperform |
View More Analyst Rankings for MPW
View the Latest Analyst Rankings
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This text Medical Properties Trust Faces Risk Of Earnings Dilution Despite Recent Tenant Leases, Analyst Says originally appeared on Benzinga.com
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