Goldman Sachs Slashes Prices On Lodging Group, But Remains Bullish in Contrarian Call

Goldman Sachs lowered RevPAR forecasts and price targets on the Lodging sector Tuesday, but kept a bullish view on the sector.

The firm noted that this is increasingly a contrarian call. They also noted that historically RevPAR has demonstrated solid growth in a slow economic growth environment. Goldman expects higher profits as rate growth replaces occupancy growth in this part of the cycle. Supply growth remains low and continues to slow, another positive. Lastly, valuation is compelling, Goldman argues.

Price Target Changes:
Choice Hotels International Inc. (NYSE: CHH) (Neutral) from $32 to $31
Gaylord Entertainment Co. (NYSE: GET) (Neutral) from $28 to $24
Starwood Hotels & Resorts Worldwide Inc. (NYSE: HOT) (Buy) from $65 to $51
Hyatt Hotels Corporation (NYSE: H) (Buy) from $43 to $38
Marriott International, Inc. (NYSE: MAR) (Neutral) from $35 to $29
Orient-Express Hotels Ltd. (NYSE: OEH) (Neutral) from $10 to $7.50
Wyndham Worldwide Corporation (NYSE: WYN) (Neutral) from $36 to $32
Host Hotels & Resorts Inc. (NYSE: HST) (Buy) from $19.50 to $14
Diamondrock Hospitality Co. (NYSE: DRH) (Neutral) from $11.25 to $8
FelCor Lodging Trust Inc. (NYSE: FCH) (Neutral) from $5.15 to $3.15
LaSalle Hotel Properties (NYSE: LHO) (Buy) from $30 to $21.50
Sunstone Hotel Investors Inc. (NYSE: SHO) (Neutral) from $8.75 to $6.30.

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