UPDATE: BMO Capital Markets Initiates Sunstone Hotel Investors at Market Perform
BMO Capital Markets initiated coverage on Sunstone Hotel Investors, Inc. (NYSE: SHO) with a Market Perform rating and a $12.00 price target.
BMO Capital Markets commented, "The company has methodically reduced its leverage from a net debt/EBITDA ratio of 7.7x during the recession to 4.5x (before preferreds), taking it out of the danger zone and putting focus back on portfolio performance. Credit goes to stability at the senior management level, enhanced transparency, and disciplined execution. However, further deleveraging and patience will be required to get to management's target of 2.5x-3.5x. … Valuation looks reasonable at current levels, in our view, and we don't anticipate a dividend component to the story until late 2013."
Sunstone Hotel Investors closed at $11.12 on Monday.
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