AG Edwards Downgrades Hospitality Properties Trust

Analyst Arthur Havener cut his rating amid uncertainty about Wyndham and Prime Hospitality leases and heightened concerns over Candlewood Hotels' liquidity

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.

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