Wyndham Destinations (WYND) - Get Report, Las Vegas Sands (LVS) - Get Report and Choice Hotels (CHH) - Get Report all were upgraded by a Wolfe Research analyst, who expects leisure and drive-related travel will outperform business and air travel after the coronavirus pandemic subsides.
In a note to clients, analyst Jared Shojaian upgraded Wyndham Destinations to outperform from peer perform with a $37 price target; Las Vegas Sands to outperform from peer perform with a $57 price target; and Choice Hotels to peer perform from underperform.
Shares of all three companies were climbing at last check.
Cruise line operators, among the worst hit by the coronavirus outbreak, were also rising. Carnival (CCL) - Get Report, Royal Caribbean (RCL) - Get Report, and Norwegian Cruise Line Holdings (NCLH) - Get Report were all posting double-digit gains.
Shojaian said, however, that business travel, international travel and air travel in general appear as if they will be challenged for some time.
On March 17, Marriott became one of the first major companies to report large-scale layoffs.
The hotel major recently said in a regulatory filing that it was borrowing $2 billion from a credit facility to increase its cash holdings and “preserve financial flexibility” in the face of market uncertainty created by the pandemic.
Argus analyst John Staszak also downgraded Hilton to hold from buy, saying the impact of covid-19 and prior capacity increases will “weigh heavily” on lodging demand in the near term and the industry will likely pause over the next 12 months before starting a new upturn.
Hilton was off slightly at last check, but Marriott was climbing 3%.
On Tuesday, Wells Fargo analyst Dori Kesten upgraded Marriott International to overweight from equal weight with a price target of $85, down from $113.
The stock's implied valuation based on 2022 estimates is attractive relative to peers, Kesten tells clients in a research note.
Marriott has underperformed Hilton by more than 10 percentage points this year, and at multiples comparable to those of Hilton, Marriott shares could appreciate about 20% over the next 12 months, the analyst contends.