Optimism is in the air with the company, which cleared a major operational hurdle very recently.
Although Friday was something of a sleepy news day for Medical Properties Trust (MPW 13.75%), the latest analyst moves concerning the stock motivated investors to plow into it. As a result, shares of the specialized real estate investment trust (REIT) surged during the trading session. They closed the day almost 14% higher in price, absolutely trouncing the 0.5% increase of the S&P 500 index.
Good deal inspires positive reactions
Two professional Medical Properties Trust-watchers weighed in with new takes on the stock Friday. Of the two, the more weighty came from Colliers Security’s David Toti. He up-shifted his recommendation on the REIT to buy from the previous neutral, placing a $6.50 per-share price target on the stock.
Toti’s peer Michael Lewis at Truist Securities also got notably more optimistic about Medical Properties Trust’s future. He cranked his price target 20% higher, raising it to $6 per share from $5.
The timing is not coincidental. Both moves came mere days after Medical Properties Trust’s news that it had reached a settlement with its most problematic tenant, the financially strapped Steward Health Care (which filed for Chapter 11 bankruptcy in May). Under the terms of the deal, the REIT will regain control over the 23 properties rented by Steward; it has already lined up new tenants for 15 of them.
A necessary exit
The Steward arrangement is a milestone for Medical Properties Trust that helps remove a millstone. The situation with the failing tenant was much of the reason for the pronounced slide in the REIT’s popularity, and the satisfying resolution has been — and will likely continue to be — an incentive for investors to re-evaluate their own takes on the company.
Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Colliers International Group and Truist Financial. The Motley Fool has a disclosure policy.