UPDATE: BMO Capital Markets Initiates Hospitality Properites Trust at Market Perform on Earnings Outlook

BMO Capital Markets initiated coverage on Hospitality Properites Trust HPT with a Market Perform rating and a $25.00 price target. BMO Capital Markets said, "HPT owns a portfolio of primarily upscale select service and extended stay hotels located throughout the US. Uniquely structured management agreements offer downside protection to property level cash flow as operators pay HPT a minimum rent/return, with shortfalls supported by security deposits and guarantees also funded by operators. However, these agreements represent a pooling of hundreds of properties at their largest, which gives more leverage to the operators when negotiating terms, in our opinion. Agreement restructuring over the past two years has resulted in significant out-of-pocket renovation expenses paid for by HPT, which will weigh on earnings growth until completed in mid-2014." Hospitality Properites Trust closed at $23.94 on Monday.