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Investing.com - JPMorgan initiated coverage on Park Hotels & Resorts (NYSE:PK) with an underweight rating and a $10.00 price target on Monday.
The investment bank cited ongoing operational challenges in key markets, particularly Hawaii, which represents approximately 30% of the company’s EBITDA, as a primary concern behind the cautious outlook.
JPMorgan also highlighted Park Hotels’ high exposure to organized labor at properties representing about 60% of hotel EBITDA as a risk factor for the hospitality real estate investment trust.
The firm expressed concerns about the current transaction environment, noting it could create obstacles for Park Hotels to achieve its targeted $300-400 million in non-core asset sales planned for 2025.
JPMorgan added that Park Hotels’ elevated net leverage ratio of 6x could keep its valuation multiple depressed compared to industry peers.
In other recent news, Park Hotels & Resorts has announced the sale of its Hyatt Centric Fisherman’s Wharf property in San Francisco for $80 million, as part of its strategic plan to divest non-core assets. This transaction aligns with the company’s ongoing efforts to enhance its portfolio and financial flexibility. Meanwhile, Truist Securities has downgraded Park Hotels & Resorts from Buy to Hold, reducing its price target to $11, based on revised financial projections for 2025 and 2026. Similarly, Citi has adjusted its outlook, lowering the price target to $13 but maintaining a Buy rating, reflecting new assumptions about the company’s operations and market conditions.
Evercore ISI has also downgraded Park Hotels & Resorts, citing renovation challenges at its Miami property and reliance on asset sales for meeting financial goals, setting a price target of $13. Jefferies, on the other hand, has increased its price target to $11 while maintaining a Hold rating, acknowledging the company’s strategic initiatives despite current market pressures. These developments reflect a range of analyst perspectives on Park Hotels & Resorts’ financial trajectory and strategic efforts. Investors are closely monitoring how the company navigates these challenges and opportunities in the hospitality sector.
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