UPDATE: Goldman Sachs Downgrades DiamondRock Hospitality to Sell on Underperformance Expectations

Goldman Sachs reduced its rating on DiamondRock Hospitality

from Neutral to Sell and lowered its price target from $9.50 to $7.75. Goldman Sachs noted, "We are moving our rating on DiamondRock to Sell from Neutral and lowering our 12-month price target to $7.75 from $9.50 and are lowering our 2013 EBITDA by 5% which is 6% below consensus. Our new price target equates to 8.8% downside and 4.4% total return downside. While DiamondRock has a strong balance sheet and high quality hotels, shares have been under pressure (down 11% since October 1 vs. down 2% for the S&P), and the company faces a combination of exposure in difficult markets, large renovations, and high valuation, which we believe will continue to drive share underperformance." DiamondRock Hospitality closed at $8.50 on Tuesday.