2024-03-07 11:09:08 ET
Summary
- MPW shares have risen ~23.3% since my Strong Buy recommendation on January 7th, compared to the S&P 500 Index return of ~9.36%. It's time to reassess my outlook.
- The lack of an auditor's consent filing raises another red flag - I'm downgrading MPW today.
- The market expects double-digit dividend yields for the next 3 years and a slight deterioration in the payout in E2026 (but without major cuts). I think that's too optimistic.
- The "fuel" from short sellers who may be forced to close their positions could be enough to push MPW stock even higher. But technicals promise only challenges ahead, in my view.
- Since I am not liquidating the entire position, but only trimming it, I'm downgrading MPW from "Strong Buy" to "Hold" today.
Instead of an investment thesis
I initiated coverage of Medical Properties Trust, Inc. ( MPW ) stock 2 months ago and since then, my strongly bullish view has been successful - MPW is up 23.3% compared to the S&P 500 Index return of 9.36% since January 7th. So basically, my 'Strong Buy' call outperformed the broader market index by a factor of ~2x....
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Medical Properties Trust: Downgrading On Another Red Flag