Host Hotels & Resorts (HST), Park Hotels & Resorts (PK), and other lodging real estate investment trusts should benefit from stronger-than-expected Q3 US hotel performance and earnings upside, BofA Securities said in a note Monday.
US revenue per available room, or RevPAR, grew 7.3% year-over-year in Q3, up from 5.7% in Q2 and 3.8% in Q1, the analysts said, adding that World Cup-related strength in July continued through August and September, exceeding both their expectations and company forecasts.
The analysts said that as a result, they expect broad-based earnings beats and higher guidance. They are raising their Q4 RevPAR growth forecast to 4% to 5%.
Their Q3 and full-year estimates are now 2.5% and 1.5% above the analyst consensus, respectively, putting them at or above the high end of company guidance.
BofA raises its price taget on Host Hotels & Resorts to $27 from $25.50, Park Hotels & Resorts to $14 from $13, Sunstone Hotel Investors (SHO) to $13.75 from $12.50, DiamondRock Hospitality (DRH) to $16 from $14, Apple Hospitality REIT (APLE) to $18.50 from $16, RLJ Lodging Trust (RLJ) to $12 from $10.50, and Summit Hotel Properties (INN) to $6 from $5.25.
The firm lowered its price target on Wyndham Hotels & Resorts (WH) to $90 from $95 and Choice Hotels International (CHH) to $115 from $120.
Price: 25.10, Change: +0.38, Percent Change: +1.54
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