Medical Properties Trust, Inc. MPW — also known as MPT — is gearing up to unveil its fourth-quarter and full-year 2023 earnings on February 21 before the opening bell. With a primary focus on the healthcare sector and a strategy centered around net-leased hospital facilities, investors are eagerly awaiting the company’s financial performance, which is expected to reflect a decline in revenues and funds from operations (FFO) per share compared to the previous year.
Recent Performance and Projections
The last reported quarter saw the company beating the Zacks Consensus Estimate for normalized FFO per share by 8.57%, marking a positive trend. However, anticipations for the fourth quarter are less optimistic, with the Zacks Consensus Estimate for quarterly revenues indicating a significant fall of 38.14% from the prior-year period.
Factors Affecting Performance
While Medical Properties boasts a strong acute care portfolio and a disciplined capital allocation strategy, challenges are mounting due to increased interest expenses in a high interest rate environment and potential exposure to struggling operators. The anticipated decline in fourth-quarter rent billed and income from financing leases are clear indicators of the headwinds faced by the company.
Analysts’ confidence in Medical Properties’ performance during the quarter has waned, as evident from the downward revision of the Zacks Consensus Estimate for the quarterly normalized FFO per share. Moreover, the full-year outlook indicates a decrease in normalized FFO per share, hinting at a tough year-over-year comparison in terms of revenue.
Quantitative Model Predictions
Despite the challenging environment, the company’s future performance remains uncertain. The combination of a negative Earnings ESP and a Zacks Rank of 4 (Sell) raises concerns about the potential for an FFO beat in the upcoming results announcement.
Potential Alternatives in the REIT Sector
For investors seeking opportunities in the broader REIT space, companies like Extra Space Storage Inc. and American Homes 4 Rent may provide more favorable prospects. Their Earnings ESP and Zacks Rank indicate potential for positive news when they report their quarterly numbers.
It’s important to remember that the analysis herein focuses solely on funds from operations (FFO) — a widely used metric in evaluating the performance of REITs.
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