Medical Properties Trust (MPW) stock has caught the attention of analysts with recent developments. Colliers Securities upgraded the stock to a Buy rating, setting a price target of $6.5. Meanwhile, Truist Securities analyst Michael Lewis maintained a Hold rating but raised his price target from $5 to $6. These positive moves stem from a significant global settlement reached by Medical Properties Trust with its tenant, Steward Health Care System, secured lenders, and the Unsecured Creditors Committee.
This settlement covers 23 hospitals previously managed by Steward. Notably, 15 of these hospitals, located in Arizona, Florida, Louisiana, Ohio, and Texas, have already been leased to new tenants. Medical Properties Trust expects to receive annual cash rental payments of approximately $160 million from these new leases, based on a $2 billion lease base, once stabilized in the fourth quarter of 2026.
While acknowledging the potential for earnings dilution due to refinancing activities over the next few years, analysts are optimistic about the long-term prospects of MPW. The settlement provides stability and clarity, paving the way for future growth. Lewis, in his analysis, highlights that Medical Properties Trust’s recovery rate of the $3.2 billion asset value is estimated at 75%. This estimate takes into account the sale of three Space Coast hospitals, with a portion of the proceeds transferred to Steward. He also considers the nine hospitals in Massachusetts where Medical Properties Trust recovers nothing and the six closed hospitals, two under construction, and 15 transitioned. While acknowledging some risk due to uncertainties about non-operating asset values and the success rates of new operators, Lewis believes this aligns with his previous models.
Lewis adjusted the 2025 FFO estimate to $1.01 per share from $1.02 per share, still exceeding the $0.92 consensus. The estimates project a 39.9% year-over-year decline in normalized FFO per share in 2024, followed by 6.0% growth in 2025. However, the analyst forecasts declining FFO per share in each subsequent year through 2029 due to dilutive debt refinancing. Despite these challenges, the settlement and the potential for long-term growth are positive signals for MPW investors. MPW shares closed Friday at $6.295, up 12.4% on the news.
