Raymond James sees steady upside to lodging REIT stocks

Hersha Hospitality Trust

10/01/2022 11:05

** Raymond James reiterates its "overweight" rating on the
U.S. lodging REIT sector as travel/hotel demand continues to
recover
    ** Brokerage upgrades shares of Pebblebrook Hotel  PEB.N  to
"outperform" from "market perform" and Hersha Hospitality  HT.N 
to "market perform" from "underperform"
    ** Brokerage expects reopening momentum to resume by March
after Omicron concerns pause 
    ** Expects upside to the current 2022-2023 estimates and the
lodging REIT stocks to move higher through the year with less
volatility than 2021
    ** "We also believe that 2022 will be a year when we see one
or more public to private M&A deals and owning stocks considered
M&A targets will pay off with improving investor sentiment and
interest," adds Raymond James
    ** Says PEB is expected to continue benefiting from its
increased weighting in the resort segment, recent investments in
the existing portfolio, and the strengthening dynamics in many
of its largest markets
    ** Though HT's leverage is still higher, the risk associated
with it is lessened due to a recovering fundamental environment
that would benefit from persistent, strong leisure demand -
brokerage
    ** However, brokerage downgrades DiamondRock Hospitality
 DRH.N  to "market perform" from "outperform"; says it is an
unlikely participant in M&A

 (Reporting by Tapanjana Rudra in Bengaluru)
 ((Tapanjana.Rudra@thomsonreuters.com;))