Jefferies Boosts PT on Hersha (HT) to $4; Still Cautious on Service Portfolio, Customer Base

Jefferies boosts target on Hersha Hospitality (NYSE: HT) over 14 percent, from $3.50 to $4, while maintaining a Hold rating following third-quarter results.

Hersha reported adjusted FFO of 14 cents per share, which was in-line with Jefferies and the Street's estimate for 14 cents per share. EBITDA was $41.8 million, versus the consensus of $41.6 million and Jefferies outlook for $39.5 million.

RevPAR in the quarter rose 8.3 percent to $127.40, with an occupany rate of 6.9 percent, up 1 point from the same period last year.

Commenting on the numbers, Jefferies said, "We believe HT's results reflect strong operating execution as the NYC market outperformed the industry and posted strong rate growth, which helped drive margin expansion, which had been expected. The urban exposure was a clear positive for the quarter, although the limited service portfolio and transient customer base temper our stance on HT given the macroeconomic uncertainty."

Jefferies is adjusting some numbers, 2011 EBITDA moves from $128 million to $130 million, 2012 EBITDA from $131 million to $132 million. For 2011, adjusted FFO outlook remains flat at 38 cents, while 2012 FFO moves from 40 cents to 41 cents.

For more ratings news on Hersha Hospitality Trust click here and for the rating history of Hersha Hospitality Trust click here.

Shares of Hersha Hospitality Trust closed at $4.44 yesterday.

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