DiamondRock Hospitality Coverage Initiated by Analysts at Morgan Stanley (DRH)
Morgan Stanley initiated coverage on shares of DiamondRock Hospitality (NYSE:DRH) in a research note issued on Thursday, StockRatingsNetwork.com reports. The firm set an “overweight” rating and a $13.00 price target on the stock. Morgan Stanley’s price objective indicates a potential upside of 23.11% from the company’s current price.
The analysts wrote, “We rate DRH Overweight with a $13 price target,representing 22% upside from current levels. Our Overweight thesis is based on the following three reasons: 1) Recent renovations and repositionings, especially the New York City portfolio, should allow for RevPAR and EBITDA outperformance in 2014; 2) the company has a clear strategy for ramping up margins over the next few years that should lead to double-digit EBITDA growth and shift DRH from a laggard to a leader; and 3) DRH’s high quality, urban centric portfolio and low leverage positions it well given current trends. Trading at 11.8x EV / 2014e EBITDA and $260k per key, we think DRH shares offer an attractive entry point. Our $13 price target is based on ~13.5x EV / 2014e EBITDA. While this is ahead of DRH’s 12.0x 5-year average and a premium to the group’s current 12.2x average, given our expectation of 16% ’13-16 EBITDA CAGR, we feel the re-rating is warranted.”
DRH has been the subject of a number of other recent research reports. Analysts at MLV Capital upgraded shares of DiamondRock Hospitality from a “hold” rating to a “buy” rating in a research note to investors on Friday, September 20th. They now have a $13.00 price target on the stock, up previously from $11.00. Separately, analysts at FBR & Co. upgraded shares of DiamondRock Hospitality from a “market perform” rating to an “outperform” rating in a research note to investors on Wednesday, September 11th. Finally, analysts at FBR Capital Markets upgraded shares of DiamondRock Hospitality from a “market perform” rating to an “outperform” rating in a research note to investors on Wednesday, September 11th. They now have a $12.00 price target on the stock, up previously from $11.00. One research analyst has rated the stock with a sell rating, four have assigned a hold rating and six have assigned a buy rating to the company’s stock. The company currently has a consensus rating of “Hold” and a consensus price target of $11.06.
Shares of DiamondRock Hospitality (NYSE:DRH) traded up 2.94% during mid-day trading on Thursday, hitting $10.87. 520,204 shares of the company’s stock traded hands. DiamondRock Hospitality has a one year low of $8.11 and a one year high of $11.07. The stock’s 50-day moving average is $10.34 and its 200-day moving average is $9.84. The company’s market cap is $2.125 billion.
DiamondRock Hospitality (NYSE:DRH) last announced its earnings results on Friday, August 9th. The company reported $0.22 EPS for the quarter, beating the Thomson Reuters consensus estimate of $0.21 by $0.01. The company had revenue of $221.18 million for the quarter, compared to the consensus estimate of $218.74 million. During the same quarter in the prior year, the company posted $0.20 earnings per share. The company’s quarterly revenue was up 23.9% on a year-over-year basis. Analysts expect that DiamondRock Hospitality will post $0.73 EPS for the current fiscal year.
The company also recently declared a quarterly dividend, which is scheduled for Thursday, October 10th. Stockholders of record on Monday, September 30th will be given a dividend of $0.09 per share. This represents a $0.34 dividend on an annualized basis and a yield of 3.22%. The ex-dividend date of this dividend is Thursday, September 26th.
DiamondRock Hospitality Company is a lodging-focused Maryland corporation operating as a real estate investment trust (NYSE:DRH).
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