Starwood Hotels Downgraded

The glow around Starwood Hotels (HOT Quote) may be dimming.

So far this year, Starwood has driven the hotel industry's recovery, talking up business prospects while issuing better-than-expected earnings guidance. But with Starwood's shares up more than 50% in the last year, Thomas Weisel analyst Jake Fuller Wednesday downgraded the industry leader to peer-perform from outperform, saying investors should consider other hotel stocks.

In Fuller's view, Starwood's earnings estimates have come up so much, so quickly that the company has less upside potential than rivals. Since the beginning of 2004, Fuller notes that Wall Street's 2005 earnings per share expectations for Starwood have jumped 35% vs. 8% for the whole group. ...