UPDATE: BMO Capital Markets Raises PT on Chesapeake Lodging Trust Following Acquisitions

In a report published Wednesday, BMO Capital Markets analyst Mark Lutenski reiterated an Outperform rating on Chesapeake Lodging Trust CHSP, and slightly raised the price target from $24.00 to $25.00. In the report, Lutenski noted, “We thought 1Q13 RevPAR was a slight disappointment given prior guidance and the performance gap between transient and group segments reported by peers that would have seemed to have favored CHSP's transient-focused portfolio. Despite a weaker 1Q13 though, management maintained its full-year RevPAR outlook of 5%-7%, citing stronger expected growth of 7%-8% in 2Q13 as an offset. Importantly, deal flow appears to be accelerating for the company, which followed up on April's acquisition activity by announcing another two deals under contract for a total cost of $165 million. This leaves roughly $60 million of investment capacity before CHSP reaches its target leverage levels, largely on the way to having fully deployed the capital raised through the January equity offering. We expect acquisitions to tail off as the company gears itself up for $60-$70 million of renovation expenditures between 2013 and 2014.” Chesapeake Lodging Trust closed on Tuesday at $24.10.