Medical Properties Trust (NYSE:MPT) stock continues to underperform the market this year as it faces some major internal and external risks. It dropped to $3.57, its lowest level since January, and has slowly formed an inverted cup-and-handle pattern, pointing to more downside.
Medical Properties Trust Stock Has Slumped as Risks Rise
Medical Properties Trust is a top company in the real estate industry, where it focuses on the healthcare industry. It buys properties and then leases them to hospital groups, which then pays it rent.
The challenge, however, is that Medical Properties Trust has struggled to collect rent. Its most notable one was Steward Healthcare, which filed for bankruptcy in 2024. Prospect, another client, stopped paying rent and filed for bankruptcy protection.
Most recently, some of its tenants, including HCA Healthcare, have struggled to make their payments. As a result, the company decided to cut dividends as its crisis mounted and sell off some of its assets. Most recently, it sold two hospitals for $371 million. It also announced a major $2.4 billion deal to refinance and extend its debt maturities. In exchange for doing this, it agreed to a hefty 9.25% payment, which is quite stiff.
Medical Properties Trust stock has also slumped because of the rising US bond yields, which have continued rising this month. The ten-year yield has jumped to 5.2%, while the short-term yields have moved above 4%. As a result, Wells Fargo and RBC have slashed their targets for the stock to $3.8 and $4.5, respectively.
MPT Stock Is Forming an Inverted Cup-and-Handle Pattern
MPT stock chart | Source: TradingView
The weekly chart shows that Medical Properties Trust stock has formed the highly bearish cup-and-handle pattern. In this case, the lower side of this pattern is at $3.07, its lowest level in January this year. This pattern is usually a sign that the bearish trend will continue.
The stock remains below all moving averages and the Supertrend indicator. Therefore, these patterns and technicals suggest that it has more downside to go. If this happens, the next level to watch will be at $3. A move below that level will point to more downside, towards $2.40, its lowest level in 2024.
Image: Shutterstock
Login to comment