Wells Fargo Cuts Lodging Stock Targets While Global RevPAR Grows
Skift Take
- Wells Fargo has cut price targets on lodging stocks under coverage due to concerns over regional banks and their impact on the hotel industry. The bank only downgraded two names - Park Hotels and Xenia Hotels - but reduced price targets on many others, including Hilton, Marriott, and Hyatt.
- STR's global "bubble chart" update shows growing momentum in the Asia Pacific region and more than half of markets globally with better than 20% growth in RevPAR versus 2019. Israel, Switzerland, Singapore, the Dominican Republic, and New Zealand led in RevPAR on an actual basis.
- HEI Hotels & Resorts has taken over management of the Marriott Jacksonville Downtown Hotel in Jacksonville, Florida, which will undergo a comprehensive renovation in the planning stages with completion anticipated in the first quarter of 2024.
The DJIA was up 141 points, Nasdaq was up 87, the S&P 500 rose 23 points while the 10 year treasury yield was down .02 to 3.55%. Lodging stocks were modestly higher. The only mover of note was AHT, down -6%.
Wells Fargo cut price targets on their lodging names under coverage with a good part of the blame being concerns over regional banks and their impact on the hotel space. They only downgraded two names, Park Hotels and Xenia Hotels, both downgraded from Overweight to Equal Weight with price targets cut to $12.50 from $17 and $13 from $18 respectively. HST’s PT was cut to $18 from $21, SHO to $9.50 from $11.50, DRN to $9 from $10.50, RHP to $96 from $101, APLE to $17 from $18, HT to $7 from $10, MAR to $183 from $190, HLT to $144 from $154, CHH to $113 from $122, PEB to $14 from $17 and RLJ to $10.50 from $13.
STR’s global “bubble chart” update through March 18 shows growing momentum in the Asia Pacific region and more than half of markets globally with better than 20% growth in RevPAR versus 2019. Among the countries with room supply of more than 50,000 rooms, Israel, Switzerland, Singapore, the Dominican Republic and New Zealand led in RevPAR on an actual basis. Singapore was also one of the leaders in occupancy along with two other Asia Pacific countries - Thailand and New Zealand. All countries in the RevPAR bottom five were the same as STR’s previous update, Indonesia, the Czech Republic, Tunisia, Poland and Hungary. Among the eight countries where RevPAR is behind 2019 levels, only two were from the Asia Pacific region while the remaining six are European countries. In growth terms, Saudi Arabia continued its momentum with a RevPAR increase of 71% from 2019. Vietnam stayed at the bottom with
