DiamondRock Hospitality sinks after downgrade

Shares of hotel real estate investment trust DiamondRock Hospitality Co. sank Monday after being downgraded by an equity analyst, based on their huge gains over the past few weeks.

UBS analyst William Truelove downgraded the Bethesda, Md.-based company to "Neutral" from "Buy" based on the stock's price, which has soared 162 percent from a low in early March as other hotel REIT companies reported better-than-expected earnings.

However, he boosted his target price on the stock to $6.75 from $5.25.

The company said earlier this month that it would report first-quarter earnings before income taxes, depreciation and amortization of between $17.5 million and $19.5 million on May 5 _ a 30 percent to 38 percent drop from the same time last year. Truelove expects further EBITDA declines of 8 percent in 2010.

Shares of DiamondRock tumbled 14.2 percent, or 98 cents, to $5.94 in midday trading. The stock has more than doubled from a 52-week low of $2.30 in November, though shares are still off the 52-week high of $14.65 from last May.