What's in the Cards for Medical Properties (MPW) in Q1 Earnings?

Zacks Equity Research

May 8, 2024 at 12:04 p.m.·3 min read

Medical Properties Trust, Inc. MPW — also known as MPT — is scheduled to report first-quarter 2024 earnings results on May 9, 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 36 cents, beating the Zacks Consensus Estimate by 33.3%.

Over the trailing four quarters, MPT beat the Zacks Consensus Estimate on three occasions and met once, with the average surprise being 17.1%. 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, which is likely to have benefited from the favorable operating trends of the healthcare industry on the back of an aging population.

Further, the adoption of a disciplined capital allocation strategy aimed at fortifying its balance sheet strength is likely to have given MPW an edge.

However, elevated 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 first-quarter rent billed is pegged at $205 million, suggesting a decline from the year-ago period’s $248.2 million.

Straight-line rent is estimated at $42.3 million, down from $56.7 million reported in the year-ago period.

The consensus estimate for income from financing leases stands at $20.4 million, suggesting a rise from $13.2 million reported in the year-ago quarter.

The Zacks Consensus Estimate for quarterly revenues is pegged at $283.3 million, implying a 19.1% 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 remained unrevised at 25 cents over the past month. The figure implies a year-over-year fall of 32.4%.

What Our Quantitative Model Predicts

Our proven model predicts a likely 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 the case here.

Medical Properties has an Earnings ESP of +10.84% and currently carries a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.

You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Performance of Other Healthcare REITs

Ventas, Inc. VTR reported a first-quarter 2024 normalized FFO per share of 78 cents, beating the Zacks Consensus Estimate of 74 cents. The reported figure increased 5.4% from the prior-year quarter’s tally.

Results reflected better-than-anticipated revenues. Also, Ventas’ same-store cash net operating income (NOI) increased year over year on strong performance across the portfolio, except for triple-net leased properties. VTR has also raised its 2024 outlook.

Healthpeak Properties, Inc. DOC reported first-quarter 2024 FFO as adjusted per share of 45 cents, beating the Zacks Consensus Estimate by a penny. The reported figure rose 7.1% from the prior-year quarter.

Results reflected better-than-anticipated revenues. Moreover, growth in total merger-combined same-store cash (adjusted) NOI was witnessed across the portfolio. DOC also revised its 2024 outlook.

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.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Ventas, Inc. (VTR) : Free Stock Analysis Report

Medical Properties Trust, Inc. (MPW) : Free Stock Analysis Report

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Medical Properties Trust, Inc. Price and EPS Surprise

Factors at Play

What Our Quantitative Model Predicts

Performance of Other Healthcare REITs

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