In a report released today, Simon Yarmak from Stifel Nicolaus maintained a Hold rating on Diamondrock, with a price target of $9.75.
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Simon Yarmak has given his Hold rating due to a combination of factors that reflect a balanced outlook for Diamondrock. The company is making strategic adjustments, such as redeeming its Series A Preferred stock, which is expected to provide a slight financial tailwind in the upcoming year. Additionally, Diamondrock’s performance in certain markets like Boston, Sedona, and Fort Lauderdale is showing promising group revenue growth, contributing positively to its future prospects.
Despite these positive indicators, the valuation metrics present a mixed picture. The shares are trading at a discount to the adjusted replacement cost estimate, yet the implied EV/EBITDA multiple remains at 10.0x, which suggests a fair valuation relative to its peers. Furthermore, while the company has a strong liquidity position, the net debt-to-EBITDA ratio indicates a moderate level of leverage. These factors collectively support a Hold rating, as they suggest potential for growth but also highlight existing risks.
In another report released on December 10, Wells Fargo also maintained a Hold rating on the stock with a $10.00 price target.