An analyst upgraded shares of Host Hotels & Resorts Inc. on Thursday, citing the real estate investment trust's relatively low price and strong balance sheet.
Host Hotels shares dropped with the broader market on Thursday, losing 51 cents, or 3.5 percent, to $13.96 in afternoon trading after hitting a 52-week low of $13.78 earlier in the session. The stock has fallen about 45 percent from a 52-week high of $26.60 last July.
Robert W. Baird analyst David Loeb upgraded the stock to an "Outperform" rating, noting that the company's shares have dropped 18 percent over the past month.
Loeb said Host's balance sheet is among the strongest of its peers. "Given a challenging operating environment, we believe Host's balance sheet is a key asset to the company, and a reason why other investors are likely to find value as a 'flight to quality' is likely to emphasize balance sheet strength," he wrote.
The analyst said Host's portfolio of resort assets are "extremely attractive to both domestic and international institutional investors." He said the company also has opportunities to grow through its international joint ventures.
Loeb noted that the lodging industry is expected to weaken in 2008 because of higher supply and potentially soft demand.
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