What's in the Cards for Medical Properties (MPW) in Q4 Earnings?
Medical Properties Trust, Inc. MPW — also known as MPT — is scheduled to report fourth-quarter and full-year 2023 earnings results on Feb 21 before the opening bell. The company’s quarterly results are expected to reflect a year-over-year decline in revenues and funds from operations (FFO) per share.
In the last reported quarter, this real estate investment trust (REIT), which acquires and develops net-leased hospital facilities, posted a normalized FFO per share of 38 cents, beating the Zacks Consensus Estimate by 8.57%.
Over the trailing four quarters, MPT beat the Zacks Consensus Estimate on two occasions for as many in-line performances, with the average surprise being 8.72%. This is depicted in the graph below:
Medical Properties Trust, Inc. Price and EPS Surprise
Medical Properties Trust, Inc. price-eps-surprise | Medical Properties Trust, Inc. Quote
Factors at Play
Medical Properties owns a premium acute care portfolio and is poised to benefit from its adoption of a disciplined capital allocation strategy. However, a rise in interest expenses in a high interest rate environment and exposure to certain troubled operators are anticipated to have cast a pall on the company’s quarterly performance to some extent.
The Zacks Consensus Estimate for fourth-quarter rent billed is pegged at $187.14 million, suggesting a decline from the prior quarter’s $229.31 million and the year-ago period’s $231.85 million.
The consensus estimate for income from financing leases stands at $18.76 million, suggesting a decline from $26.07 million in the prior quarter and $48.92 million reported in the year-ago quarter.
The Zacks Consensus Estimate for quarterly revenues is pegged at $235.38 million, implying a 38.14% fall from the prior-year quarter’s reported figure.
Medical Properties’ activities during the to-be-reported quarter were inadequate to garner analysts’ confidence. The Zacks Consensus Estimate for the quarterly normalized FFO per share has been revised 22.9% downward to 27 cents over the past two months. Also, the figure implies a year-over-year fall of 37.21%.
For 2023, MPW expected normalized FFO per share in the range of $1.56-$1.58.
For the full year, the Zacks Consensus Estimate for normalized FFO per share is pegged at $1.50. The figure indicates a 17.58% decrease year over year based on a 26.58% year-over-year fall in revenues to $1.13 billion.
Here Is What Our Quantitative Model Predicts:
Our proven model does not conclusively predict a surprise in terms of FFO per share for Medical Properties this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an FFO beat, which is not the case here.
Medical Properties currently carries a Zacks Rank of 4 (Sell) and has an Earnings ESP of 6.75%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks That Warrant a Look
Here are two stocks from the broader REIT sector — Extra Space Storage Inc. EXR and American Homes 4 Rent AMH — you may want to consider as our model shows that these have the right combination of elements to report a surprise this quarter.
Extra Space Storage, scheduled to report quarterly numbers on Feb 27, has an Earnings ESP of +1.08% and carries a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.
American Homes 4 Rent, slated to release quarterly numbers on Feb 22, has an Earnings ESP of +1.68% and carries a Zacks Rank of 3 at present.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
Note: Anything related to earnings presented in this write-up represents funds from operations (FFO) — a widely used metric to gauge the performance of REITs.
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Extra Space Storage Inc (EXR) : Free Stock Analysis Report
Medical Properties Trust, Inc. (MPW) : Free Stock Analysis Report
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