UPDATE: ISI Group Downgrades Strategic Hotels & Resorts

In a report published Wednesday, ISI Group downgraded its rating on Strategic Hotels & Resorts

from Buy to Neutral, and reiterated its $8.00 price target. ISI Group noted, “As we noted in our recent '13 outlook, we have found that over the last 20 years, lodging stocks work best when GDP growth is north of 3-4%--outside of that macro backdrop—investors should expect continued trading volatility. Accordingly, we are downgrading Starwood (up 20% over the last 60 days), HST (+23%), LHO (+18%), BEE (+17%) and SHO (+18%) to Neutral from Buy. For those investors that need to stay invested, our top picks are SHO, BEE and LHO. While we have Neutral ratings across our C-Corp coverage universe, the stocks screen nearly 2 multiple turns cheaper than REITs—with a key catalyst for multiple expansion coming from better than expected jobs data (ADR growth will accelerate). More constructive comments from our China economist, Don Straszheim, are also encouraging. That said, near-term headline risk outweighs upside potential.” Strategic Hotels & Resorts closed on Tuesday at $6.85.