UPDATE: Citigroup Downgrades DiamondRock Hospitality to Neutral

Citigroup reduced its rating on DiamondRock Hospitality (NYSE: DRH) from Buy to Neutral and lowered its price target from $11 to $10.

Citigroup commented, "Our Buy thesis had been based on relative valuation, the potential for value creation through capital deployment and the potential for the portfolio to outperform, as group business accelerates and renovation disruption subsides. The story has changed. Quarterly results have been choppy and operating momentum is below our expectation heading into next year. The shares now trade in-line with the peer group, despite share price underperformance in both 2011 and year-to-date, as earnings growth in the portfolio has lagged. External growth has been disappointing."

DiamondRock Hospitality closed at $9.59 on Thursday.

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