AG Edwards downgraded Hospitality Properties Trust (HPT) to sell from hold.
Analyst Arthur Havener says uncertainty surrounding long-term implications of Wyndham (WBR) and Prime Hospitality (PDQ) leases; heightened concerns over Candlewood Hotels' liquidity, and the subsequent impact on HPT led to his downgrade. He says WBR has defaulted on 2 leases and Candlewood's minimum net worth recently violated its pact with HPT.
Havener says he doesn't think HPT's current dividend yield offers an attractive risk-reward scenario. He thinks its stock is vulnerable to a meaningful pullback, representing more accurate assessment of its portfolio concerns, industry conditions, and lack of earnings visibility, among other things.