UPDATE: JP Morgan Upgrades Strategic Hotels & Resorts to Overweight on Asset Quality

JP Morgan raised its rating on Strategic Hotels & Resorts BEE from Neutral to Overweight and increased its price target from $7 to $9. JP Morgan commented, "Why are we upgrading now? (1) BEE's assets are located in supply-constrained, high-end markets, which are likely to outperform the industry in a sustained recovery. U.S. operating fundamentals (~88% of TTM EBITDA) remain sound, with group business (~43% of 2011 occupied room nights) a likely driver of more rate-driven RevPAR growth as rates that were booked at weaker points in the cycle expire. (2) A continued increase in high quality urban asset sales should highlight BEE's attractive net asset value, which trades at a 32% discount to transaction cost, the largest discount among the lodging REITs." Strategic Hotels & Resorts closed at $5.84 on Monday.