UPDATE: Goldman Sachs Downgrades China Lodging Given Recent Outperformance

In a report published Wednesday, Goldman Sachs analyst Justin Kwok downgraded the rating on

from Buy to Neutral, but raised the price target from $25.30 to $26.20. In the report, Goldman Sachs noted, “We downgrade China Lodging (HTHT) to Neutral from Buy given its recent outperformance. Since we upgraded the stock to Buy on Oct 10, 2013, HTHT is up 44%, better than its hotel peer average (+9%) and NASDAQ Composite (+11%). This was driven by its relatively defensive lodging demand exposure amid China slowdown and austerity measures, and a resumption of RevPAR growth in 2H13 to 1% yoy versus flat yoy in 2Q, in our view. While we are still positive on the company's structural drivers, at current valuations, we find relatively more attractive risk/reward in the China economy hotel segment through Home Inns (HMIN, CL-Buy, Feb 11 close US$36.86).” China Lodging closed on Tuesday at $27.99.