Nomura Securities Downgrades Host Hotels (HST) and Hyatt Hotels (H) to Neutral

October 25, 2016 2:38 PM EDT
Get Alerts HST Hot Sheet
Price: $18.15 --0%

Rating Summary:
    6 Buy, 20 Hold, 2 Sell

Rating Trend: = Flat

Today's Overall Ratings:
    Up: 10 | Down: 16 | New: 50
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Nomura Securities downgraded Host Hotels (NYSE: HST) from Buy to Neutral with a price target of $16.00 (from $19.00). Hyatt Hotels (NYSE: H) was downgraded from Buy to Neutral with a price target of $54 (from $59). Analyst Harry C. Curtis said he was downgrading due to "asset-heavy business models."

"Our lower outlook for 2.7% RevPAR growth in 2017 should drive 7-8% EBITDA and FCF growth for Buy-rated asset-light business models. From current prices, we expect total returns of 17-19% for HLT and MAR, which assumes zero multiple expansion. For asset-heavy(ier) models like HST and H, 2.7% RevPAR generates little EBITDA growth due to cost pressures. Their multiples are unlikely to expand this late in the cycle, so total return is limited to ~6%, thus the Neutral ratings," said Curtis.

For an analyst ratings summary and ratings history on Host Hotels click here. For more ratings news on Host Hotels click here.

Shares of Host Hotels closed at $15.54 yesterday.

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