STAY - Extended Stay America on watch after JPMorgan turns bullish

JPMorgan upgrades Extended Stay America (STAY) to an Overweight rating after having it set at Neutral.The firm says it likes the risk-reward in STAY due to the reasonably good operating fundamentals and above sector occupancy, RevPAR, and margin trends given its drive-to, non-urban, non-convention, brown-collar traveler exposures and business model.The recent stock price underperformance versus peers and absolute attractive valuation at sub-9X 2022E EV/EBITDA are also noted."We sense apathetic investor sentiment toward STAY given a perception that it was the sector outperformer earlier, but now the other, more beaten-up lodging names (either from a stock perspective or on an operating fundamentals basis) likely will outperform post COVID-19 vaccine (whether that is in late 2020/early 2021). We think STAY shares have legs over the near to medium term, before a further demand recovery may warrant investors transitioning into more corporate/group/urban-heavy hotel owners like RHP, HST, and PK, and are a good

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Extended Stay America on watch after JPMorgan turns bullish