Morgan Stanley analyst Stephen Grambling maintained a Sell rating on Sunstone Hotel (SHO – Research Report) on February 21 and set a price target of $10.00.
Stephen Grambling has given his Sell rating due to a combination of factors observed in Sunstone Hotel Investors’ recent financial performance and future guidance. The company’s fourth-quarter EBITDA was reported to be in line with market consensus but showed a decrease compared to the previous year, primarily due to weaker margins. While the overall revenue exceeded expectations with better RevPAR and other revenue streams, these gains were not sufficient to overcome the impact of labor-related challenges on profitability.
Looking ahead, Sunstone’s guidance for 2025 presented a less optimistic outlook than anticipated. The company’s projected EBITDA range was slightly below consensus estimates, and despite expectations for RevPAR growth, the anticipated contributions from recent acquisitions like the Hyatt Regency San Antonio and partial input from Andaz Miami are not expected to significantly alter the trajectory in the near term. These factors, coupled with the potential pressure on shares due to the softer guidance, led to a Sell rating from Grambling.
SHO’s price has also changed slightly for the past six months – from $10.280 to $10.650, which is a 3.60% increase.
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