REIT - Medical Properties Trust Inc. is Attracting Investor Attention: Here is What You Should Know | Benzinga
Medical Properties (NYSE: MPW) is one of the stocks most watched by Zacks.com visitors lately. So, it might be a good idea to review some of the factors that might affect the near-term performance of the stock.
Shares of this health care real estate investment trust have returned +11.8% over the past month versus the Zacks S&P 500 composite's +4.8% change. The Zacks REIT and Equity Trust - Other industry, to which Medical Properties belongs, has gained 2.4% over this period. Now the key question is: Where could the stock be headed in the near term?
Although media reports or rumors about a significant change in a company's business prospects usually cause its stock to trend and lead to an immediate price change, there are always certain fundamental factors that ultimately drive the buy-and-hold decision.
Revisions to Earnings Estimates
Rather than focusing on anything else, we at Zacks prioritize evaluating the change in a company's earnings projection. This is because we believe the fair value for its stock is determined by the present value of its future stream of earnings.
We essentially look at how sell-side analysts covering the stock are revising their earnings estimates to reflect the impact of the latest business trends. And if earnings estimates go up for a company, the fair value for its stock goes up. A higher fair value than the current market price drives investors' interest in buying the stock, leading to its price moving higher. This is why empirical research shows a strong correlation between trends in earnings estimate revisions and ...