4 big analyst cuts: JPMorgan sees dividend cut at hospital landlord giant MPW

Here is your Pro Recap of the biggest analyst cuts you may have missed since Friday: downgrades at CVS Health, Medical Properties Trust, Napco Security Technologies, and Insulet.

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Medical Properties Trust slashed at JPMorgan

Medical Properties Trust (NYSE:MPW) shares were falling more than 4% premarket today after JPMorgan downgraded the company to Underweight from Neutral and cut its price target to $7.00 from $9.00, as reported in real time on InvestingPro.

Analysts wrote that the stock's initial 15% plunge - after a negative Wall Street Journal report regarding its deal with Prospect Medical Holdings and MPW's rebuttal press release" - underscores "how sensitive this stock has become to tenant headlines/dynamics (particularly to the downside) and its Prospect and Steward exposures."

JPMorgan (NYSE:JPM) added that, even after Friday's decline and a 40% drop so far this year, the stock is still trading in the mid-to-high single digits with arguably "quite high" spot debt costs and noting that "its external growth engine continues to be 'in the box.'" The analysts also foresee a dividend cut, as "we do not see any economic rationale for maintaining the current dividend level which is now translating into ~17% yield."

CVS Health cut to Hold

Edward Jones downgraded CVS Health (NYSE:CVS) to Hold from Buy following reports that Blue Shield of California will no longer be using CVS Health's Caremark, its current pharmacy-benefit manager. As a result, shares plunged more than 8% on Thursday.

According to CVS, the financial impact associated with the partial termination of the Blue Shield of California contract is not expected to have an impact on its previously issued 2023 guidance and is expected to have an immaterial impact on our longer-term outlook.

Although is just one contract, Edward Jones is of the opinion that it introduces an element of uncertainty for the PBM sector. Nevertheless, the firm holds the view that the integration of CVS's drugstore business, Aetna health insurance, specialized drug offerings, and expansion of patient care offerings should help CVS become a one-stop shop for healthcare services.

Two more downgrades

William Blair downgraded Napco Security Technologies (NASDAQ:NSSC) to Market Perform from Outperform.

Shares plunged more than 34% premarket today after the company said it would revise its financial statements over the first three quarters of its 2023 fiscal year as it had identified certain errors related to its calculation of cost of goods sold and inventory.

Baird downgraded Insulet (NASDAQ:PODD) to Neutral from Outperform and cut its price target to $219.00 from $320.00.

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