UPDATE: Wells Fargo Securities Downgrades Host Hotels and Resorts on Multiple Negative Factors

In a report published Monday, Wells Fargo Securities analyst Jeffrey J. Donnelly downgraded the rating on Host Hotels and Resorts HST from Outperform to Market Perform. In the report, Wells Fargo Securities noted, “Downgrading rating to Market Perform from Outperform based upon a combination of factors that we believe will restrain outperformance: (1) Softening Group Demand Outlook – see our report dated 10/27/13, (2) Relative improvement in future catalysts for peer lodging REITs, and (3) plateau or reversal in capital rotation that favored short-term lease structure in the face of sharp increases in long-term interest rates. Accordingly, the prospect of a material higher valuation is limited in our view and therefore we can no longer support our strongest rating. Our valuation range remains $19-20.” Host Hotels and Resorts closed on Friday at $18.78.