What’s in the Cards for Medical Properties in Q4 Earnings?

Medical Properties Trust, Inc. (MPW Quick QuoteMPW – Free Report) — also known as MPT — is scheduled to report fourth-quarter and full-year 2024 earnings results on Feb. 27, before the opening bell. While the company’s quarterly results are expected to reflect a year-over-year rise in revenues, normalized funds from operations (FFO) per share may exhibit a decline.

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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 16 cents, missing the Zacks Consensus Estimate by 20%.

Over the trailing four quarters, MPT beat the Zacks Consensus Estimate on two occasions and missed twice, with the average surprise being 6.1%. This is depicted in the graph below:

 

 

Factors to Consider Ahead of Q4 Results

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 and exposure to certain troubled operators are anticipated to have cast a pall on the company’s quarterly performance to some extent.

Projections for MPW

The Zacks Consensus Estimate for fourth-quarter rent billed revenues is pegged at $159.6 million, suggesting a rise from $78.4 million reported in the year-ago period.

The Zacks Consensus Estimate for straight-line rent revenues is pegged at $38.6 million, suggesting a rise from the $166.8 million loss reported in the year-ago period. The consensus mark for interest and other income stands at $9.8 million, suggesting a rise from the $53.5 million loss reported in the prior-year quarter.

The Zacks Consensus Estimate for quarterly revenues is pegged at $220.8 million, implying a 280.4% rise from the prior-year quarter’s reported figure.

However, the consensus mark for income from financing leases stands at $9.8 million, suggesting a fall from $19.4 million reported in the year-ago quarter.

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 16 cents over the past two months. The figure implies a year-over-year fall of 55.6%.

For the full year 2024, the Zacks Consensus Estimate for normalized FFO per share is pegged at 78 cents. The figure indicates a 50.9% decrease year over year. The consensus mark for revenues stands at $984.5 million, indicating a year-over-year rise of 12.9%.

What Our Quantitative Model Predicts

Our proven model does not conclusively predict a surprise in terms of normalized 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 has an Earnings ESP of +1.83% and currently carries a Zacks Rank of 4 (Sell). 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 Quick QuoteVTR – Free Report) reported a fourth-quarter 2024 normalized FFO per share of 81 cents, beating the Zacks Consensus Estimate by a penny. The reported figure increased 6.6% from the prior-year quarter’s tally.

Results reflected an increase in same-store cash net operating income, led by higher Senior Housing Operating Portfolio (“SHOP”) same-store average occupancy. Currently, VTR carries a Zacks Rank of #3.

Welltower Inc.’s (WELL Quick QuoteWELL – Free Report) fourth-quarter 2024 normalized FFO per share of $1.13 surpassed the Zacks Consensus Estimate by a penny. The reported figure improved 17.7% year over year.

Results reflected a rise in revenues on a year-over-year basis. The total portfolio same-store net operating income (SSNOI) increased year over year, driven by SSNOI growth in the SHOP. Currently, WELL carries a Zacks Rank of #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

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.