Medical Properties Trust (MPW) stock rose to 200EMA: is it a buy?

By:
on Apr 15, 2024
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  • Medical Properties Trust shares jumped sharply on Monday.
  • The company has continued its asset disposals recently.
  • It jumped to the crucial resistance at the 200-day moving average.

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Medical Properties Trust (NYSE: MPW) stock price continued its strong recovery on Monday as it surged to a high of $5.32, its highest swing since December 2023. It has been one of the best-performing REIT in the past few weeks as it jumped by over 60% from its lowest point in 2023.

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Some progress noted

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Medical Properties Trust, the embattled real estate company has made some progress in the past few months as it works to fix its business.

Last month, Steward Healthcare, its biggest tenant, agreed to sell its doctor network to Optum, a company owned by UnitedHealth. The deal is a positive thing for MPW because Steward is its biggest tenant. 

As a result, there are signs that Steward will be able to clear some of its outstanding bills to Medical Properties Trust. Still, as I warned recently, Steward is facing substantial risks because of its huge debt and payments to suppliers. 

Medical Properties has also been selling some of its assets to cover its debt. Earlier this month, it completed its sale of facilities to Prime Healthcare in a deal valued at $350 million. It will use these funds to boost its balance sheet and fund operations.

Most recently, the company said that it would sell some of its operations in Utah in a $886 million deal. In a note, the company said:

“Our primary focus remains on accelerating our capital allocation strategy, and we are now confident that we will exceed our initial target of $2.0 billion in liquidity transactions in 2024 based on the valuations achieved on recent transactions and the terms we are actively negotiating for additional transactions.”

Therefore, these actions mean that the company is at a better place than where it was a few months ago. However, it still faces major risks ahead. The biggest risks is Steward Healthcare, which will likely remain under pressure for a while. In addition to being its landlord, MPT is also a big owner of Steward.

The other big risk is that Medical Properties Trust has big maturities coming up in the next few years. Its biggest maturity of $3 billion will be in 2026. That will be a big challenge, especially if interest rates remain at an elevated level.

Medical Properties Trust stock forecast

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MPW chart by TradingView

Looking at the daily chart, we see that the MPW share price has rebounded sharply in the past few weeks. The stock soared to a key resistance point at $5.32. As shown above, this price was along the 200-day Exponential Moving Average (EMA).

In most periods, the 200EMA is one of the most important levels. A move above the level would open the possibility of the price forming a golden cross pattern, where it crosses with the 50 EMA. 

Therefore, the outlook for the stock is moderately bullish as the company continues pushing some positive news. More upside will only be confirmed if the stock surges above the 200-day moving average. If this happens, the key point to watch will be at $6.52, its lowest swing on March 24th.

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