“Chesapeake Lodging shares rise on upgrade”

Chesapeake Lodging shares rise on upgrade

Posted: 18 Oct 2010 08:36 AM PDT

On Monday October 18, 2010, 11:36 am EDT

NEW YORK (AP) -- Shares of Chesapeake Lodging Trust climbed nearly 4 percent Monday after an analyst said the hotel owner is well-positioned to buy more properties that will boost earnings.

THE SPARK: KeyBanc Capital Markets analyst Dennis Forst lifted his stock rating on the Annapolis, Md., real estate investment trust to "Buy" from "Hold" and raised his adjusted funds from operations estimates for the third and fourth quarters and for the year.

THE BIG PICTURE: The hotel market is slowly recovering and is expected to continue its crawl through the next year. Revenue per available room, a key gauge in the hotel industry, has improved year-over-year since March. Still, concerns remain that the weak economy could take another toll on the industry.

THE ANALYSIS: Armed with $40 million in cash and no debt after going public in January, the REIT plans to buy upscale hotels in major destination cities. Its clear balance sheet gives Chesapeake Lodging a strong advantage over other hotel REITS, Forst said.

"The company is not the only offensive minded lodging REIT in this market but should be able, in a disciplined aggressive fashion, to become a significant player in the lodging sector over the next two to three years," Forst wrote.

SHARE ACTION: Shares of the company rose 66 cents, or 3.9 percent, to $17.41 in morning trading Monday.

This entry passed through the Full-Text RSS service — if this is your content and you're reading it on someone else's site, please read our FAQ page at fivefilters.org/content-only/faq.php
Five Filters featured article: Beyond Hiroshima - The Non-Reporting of Falluja's Cancer Catastrophe.