UPDATE: Goldman Sachs Upgrades FelCor Lodging Trust on 2014 EBITDA Upside, Dividend Expectations

In a report published Thursday, Goldman Sachs analyst Steven Kent upgraded the rating on

from Neutral to Conviction List-Buy, and raised the price target from $6.20 to $7.25. In the report, Goldman Sachs noted, “We add FelCor to the Buy List as we expect the company to outperform peers on RevPAR growth in 2014. FelCor ranks favorably in our fundamental framework and scores well on metrics relating to supply increase, RevPAR growth trends year to date, and 2014E growth. Current balance sheet metrics for FelCor do not compare very favorably. However, we expect leverage metrics to progressively improve at the company, and see upside for EBITDA and AFFO expectations as well. Our 2014-2015 expectations for AFFO are higher than Street expectations by 13% to 17%. We expect FelCor to reinitiate a common dividend, albeit nominal, as early as 4Q2013. Our target price of $7.25 implies 24% in total returns (including a 1% dividend yield).” FelCor Lodging Trust closed on Wednesday at $5.98.