Morgan Stanley Maintains Overweight on Host Hotels & Resorts After Acquisition Cancellation

Morgan Stanley has published a research report on Host Hotels & Resorts HST after the company cancelled its acquisition of the Grand Hyatt in Washington DC that was announced earlier this month. In the report, Morgan Stanley writes, "Despite current macro-uncertainty, we continue to believe that the lodging up-cycle will be sustainable and robust for several years. HST's color on group booking trends during their 3Q conference call supports our view that demand is stable despite the macro environment. We believe that these long-term fundamental trends coupled with a valuation attractive relative to other premium REITs and relative to HST's historical FFO multiple, implied cap rate and price per key make the stock a compelling long-term risk/reward opportunity. However, near term we believe HST shares, along with the rest of the lodging space could be pressured until there is clarity surrounding the macro outlook." Morgan Stanley maintains its Overweight rating and $16 price target on Host Hotels and Resorts, which is currently trading down $0.19 from yesterday's $14.62 closing price.