Prudential downgraded LaSalle Hotel (LHO ), Felcor Lodging (FCH) and
Host Marriott (HMT ) to hold from buy.
Analyst Jim Sullivan says he downgrades the Hotel REIT sector to
market perform from market outperform. He feels at this time
stocks in this sector appear to be fully priced given negative
industry trends in the weak economy. He is seeing a rise in bookings and attrition, which he says makes it difficult for him to remain confident on the group given its downside
risk to EPS. He expects these stocks to trade sideways from here, although they still have attractive dividend yields and healthy balance sheets.
Sullivan cut the $2.62 LaSalle 2001 EPS estimate to $2.55, and trimmed the $2.85 2002 to $2.70. He cut the $20 target to $18.