Shares of real estate investment trust (REIT) Medical Properties (NYSE:MPW) are down over 8% at the time of writing after news came out that UnitedHealth’s Optum (NYSE:UNH) abandoned a deal to buy Steward Health’s physician group.
Reports from the Boston Globe say Optum is no longer pursuing the purchase, which was supposed to help Steward pay off its debts to Medical Properties Trust. A spokesman confirmed that Optum has stopped working on the agreement.
MPW has seen its shares struggle over the past couple of years as investors grew worried about the quality of its tenants. Things were made worse when Medical Properties slashed its dividend back in September of 2023, which fell from $0.29 to $0.15 per share. After that, Steward, which is Medical Properties’ biggest tenant, filed for Chapter 11 bankruptcy, which poses a significant financial threat to 18.5% of REIT’s assets.
As a result, stock traders have pushed Medical Properties’ short interest to 35% and might continue to send the stock lower.
Is MPW a Good Stock to Buy Now?
Turning to Wall Street, analysts have a Moderate Sell consensus rating on MPW stock based on five Holds and two Sells assigned in the past three months, as indicated by the graphic below. After a 48% decline in its share price over the past year, the average MPW price target of $5.01 per share implies 17.19% upside potential.
