XHR - Morgan Stanley upgrades Xenia DiamondRock ahead of election vaccine news
Morgan Stanley analyst Thomas Allen upgrades hotel REITs Xenia Hotel & Resorts ([[XHR]] -4.0%) and DiamondRock Hospitality ([[DRH]] -1.3%) to Equal-Weight from Underweight, as he sees potential for some upside on travel after a successful vaccine announcement.The stock market impact of the election could also create upside, he wrote in a note.Lifts XHR price target to $8 from $7; DRH target stays at $5."We had remained Underweight DRH/XHR given their higher financial leverage, but given significant liquidity cushions (which XHR recently enhanced by selling assets and DRH by issuing Preferreds) and as we approach potential breakeven EBITDA (we forecast 1Q21), we expect investors will be less concerned about or even favor leverage," Allen wrote.Sees gaming stocks Boyd Gaming ([[BYD]] -4.0%) and Caesars Entertainment ([[CZR]] -4.5%) as more attractive Overweights "given limited structural headwinds post vaccine."Expects lodging stocks' Q3 EBITDA to fall 83% Y/Y amid continued pressure in the industry.Boyd Gaming
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Morgan Stanley upgrades Xenia, DiamondRock ahead of election, vaccine news