Medical Properties estimated to report lower Q4 earnings on tenant troubles

Medical Properties (NYSE:MPW) is estimated to report lower top- and bottom-line figures on account of continued tenant troubles.

The REIT had nudged up its 2023 guidance as Q3 earnings dropped less than the Wall Street estimates. But revenue fell short of expectations. During Q4'22, MPW matched the consensus while working through issues with tenants including Prospect Medical Holdings and Pipeline Health.

However, MPW recently disclosed taking steps to recover uncollected rents from its troubled tenant, Steward Health Care System. The health care REIT took a Q4 noncash charge of about $225M to write off consolidated straight-line rent receivables and for other items. It also said it's granting a $60M bridge loan to Steward, which is about $50M behind in rent payments as the tenant struggles with liquidity issues.

Steward Health Care had hired restructuring advisers to improve its liquidity and restore its balance sheet. The tenant is pursuing several strategic transactions, including the potential sale or re-tenanting of certain hospital operations as well as the divestiture of non-core operations.

MPW is scheduled to announce Q4 earnings results on Wednesday, February 21st, before market open.

The consensus FFO estimate is $0.29 (-33.02% Y/Y) and the consensus revenue estimate is $242.96M (-36.14% Y/Y).

Seeking Alpha's Quant Rating system rates MPW as Sell, mainly because of its declining growth and decelerating momentum. Meanwhile, the sell-side analysts and SA authors give the stock a Hold rating.

Medical Properties Trust could cut its quarterly distribution further to address debt with the market having already lost confidence in its assets. A tripartite of headwinds will complicate shareholder value creation for the foreseeable future, and MPW should consider a sale of its entire REIT, according to SA contributor Pacifica Yield.

On peer performance, LTC Properties posted Q4 FFO that fell more than expected as its total expenses rose during the quarter. CareTrust REIT (CTRE) reported earnings that were in-line and revenue that beat consensus.

Considering the negative market sentiments on MPW's financial performance, the stock is currently trading close to a 52-week low of $2.92 at $3.58. It has lost 7.27% of value during a course of the last 5 trading days.