2023-03-30 09:59:27 ET
Wells Fargo analyst Dori Kesten revised her coverage of four lodging REITs after assessing their respective liquidity profiles and debt maturities, according to a Thursday note.
For the upgrades, Apple Hospitality REIT ( NYSE: APLE ) and DiamondRock Hospitality Company each were raised to Outperform from Equal Weight, as "1) both ranked in the top 3 of our liquidity analysis, 2) both have debt maturing in 2023/24 that amounts to just 5% of their respective market capitalizations, and 3) each company's share price has lagged its peers YTD by 400-450bps.
On the other side of the fence, Kesten downgraded both Park Hotels & Resorts ( NYSE: PK ) and Xenia Hotels & Resorts ( NYSE: XHR ) to Equal Weight from Overweight. For PK, in particular, "we believe the best case scenario for its '23 CMBS [commercial mortgage-backed security] maturity is well known, while other scenarios may pause its current YTD share price outperformance."
Meantime, Xenia ( XHR ) stood at the lower half of Kesten's liquidity analysys vs. peers, has near-term renovation headwinds and "greater than the average of '24 maturities as % of its market cap."
APLE and DRH gained 1% and 1.4% , respectively, while PK, -0.1% , and XHR, -0.2% , slipped in Thursday morning trading.
Looking at SA's lodging REIT screener , the Quant system favored DRH and APLE the most, followed by Host Hotels & Resorts ( HST ) and PK.
See why SA contributor The Investment Doctor last week flagged DRH with a Buy rating .
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Apple Hospitality, DiamondRock upgraded, Park Hotels, Xenia cut at Wells Fargo