KeyBanc Downgrades Summit Hotel Properties (INN) to Hold; Valuation Call

KeyBanc downgraded Summit Hotel Properties (NYSE: INN) from Buy to Hold.

KeyBanc analyst says, "The stock has surpassed our former $9 price target, has significantly outperformed the market and competitors year and quarter-to-date, and now trades at a valuation premium to the average lodging REIT. We are also watching a longer ramp in INN's new franchises post the Choice "divorce"; more difficult industry match ups in the next few quarters; and middle class American spending trends. The Company has completed fewer acquisitions this year than we had originally modeled and transactional and transitional events are playing out slower than we expected causing us to reduce our EPS forecast for 2012."

"...we expect 4Q11 adjusted funds from operations (AFFO) of $0.11. That brings our AFFO estimate for FY11 to $0.71 vs. company guidance of $0.71-$0.74. For FY12 we are lowering our AFFO expectations to $0.83 from $0.97."

For an analyst ratings summary and ratings history on Summit Hotel Properties click here. For more ratings news on Summit Hotel Properties click here.

Shares of Summit Hotel Properties closed at $9.69 yesterday.

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