What happened

Shares of Medical Properties Trust (MPW -0.22%) tumbled another 15.1% in December, according to data provided by S&P Global Market Intelligence. That pushed shares of the healthcare-focused real estate investment trust (REIT) down more than 50% for the year. 

The main factors that continue weighing on shares are concerns about the impact of rising interest rates and the health of one of the healthcare REIT's largest tenants. 

So what

Analysts continued to lower their outlook on Medical Properties Trust last month. For example, Mizuho analyst Vikram Malhotra decreased that firm's price target on Medical Properties Trust from $20 to $18 per share at the beginning of the month, though they kept their buy rating on the stock. The analyst trimmed their price target after making more conservative estimates for 2023 following the recent rise in interest rates and a pickup in flu cases. 

Credit Suisse analyst Tayo Okusanya also cut their price target on the stock last month, reducing it from $17 to $11 while keeping their neutral rating on the stock. The analyst believed that the uncertain outlook on the REIT's top tenant, Steward, would keep putting pressure on the stock price. 

The company did get some good news about Steward toward the end of the month after that company extended their current asset-backed loan agreement through December 2023. The extension will give it more financial flexibility in the upcoming year. 

Mizuho analyst Malhotra sees that extension as a catalyst for the stock. That led them to reiterate their buy rating and $18 price target for the stock following the news. 

Now what

Last year was challenging for Medical Properties Trust, as rising interest rates and the REIT's falling stock price impacted its ability to make acquisitions. That led the company to sell several assets to bolster its liquidity.

One of the downsides of those sales is it increased its exposure to Steward, which continued to face headwinds from the pandemic and its aftermath. There were concerns that Steward could face a liquidity issue if it couldn't extend its existing loan. With that extension secured, it should be able to continue paying rent.

That has already started to take some of the pressure off Medical Properties Trust's stock, which has rallied more than 10% to start 2023. That rebound could continue, especially if the situation with Steward, as well as interest rates, stabilize in 2023.