NEW YORK Hotel stocks were hard hit yesterday after Bear Stearns downgraded the hotel group based on concerns about the slowing economy.
The downgrade, made by analyst Jason Ader, targeted Hilton Hotels, Marriott International, Starwood Hotels & Resorts, Meristar Hospitality, Extended Stay America and Four Seasons. It left all but Meristar in the red on Monday, as he recommended that investors take money off the table following a 25% year-to-date rise for large-cap lodging stocks.
Hardest hit by Aders projections was Four Seasons, which fell $4.50, or 7.3%, to $57.44 after it was cut to “neutral” from “buy.” Hilton and Marriott, which experienced identical ratings cuts, dropped 2.7% and 1.2%, respectively, to $9.13 and $41.38.
Though Ader made the most recent downgrade on the hotel group, he didn t make the first. Back in October, Merrill Lynch analyst David Anders made a negative call on the group citing decelerating RevPAR, a slowing economy, and increasingly difficult comparables among the factors responsible for the downgrade.
However, Salomon Smith Barney Analyst Michael Rietbrock has a different take on the situation. Rietbrock told clients Monday that he is becoming increasingly optimistic in his outlook for the group, noting that if 2001 were going to be a bad year for travel, early warning signs already would be evident. He said that he believes most travel indicators remain “relatively healthy.” (12/5/00)
Source: CBS.MarketWatch.com