Medical Properties Trust Faces Tenant Troubles and Uncertainty Despite Recent Stock Rally
• Medical Properties Trust recognized significant challenges with key tenants Steward Health Care and Prospect Medical Holdings, writing down assets and shifting to cash accounting.
• MPW aims to raise $2B in liquidity this year to address issues; has made some initial progress but has 3-4 more quarters to execute plans.
• Recent stock recovery seems like a bear market rally and further upside could be limited by uncertainties in MPW's plans and ability to rejuvenate growth.
• MPW's high 14.4% dividend yieldprovides some downside support but outlook is unclear without 2024 guidance.
• Risk/reward appears balanced leaning bearish; stock likely to remain undervalued unless investors have high conviction in $2B capital raising plans.