The firm upgraded the REIT hotel company due to valuation.
Shares of Sunstone Hotel Investors closed at $14.02 on Friday.
Separately, TheStreet Ratings team rates SUNSTONE HOTEL INVESTORS INC as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
"We rate SUNSTONE HOTEL INVESTORS INC (SHO) a BUY. This is driven by several positive factors, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its robust revenue growth, increase in stock price during the past year, impressive record of earnings per share growth, increase in net income and reasonable valuation levels. We feel these strengths outweigh the fact that the company shows low profit margins."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 10.6%. Since the same quarter one year prior, revenues rose by 28.2%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- Compared to where it was a year ago today, the stock is now trading at a higher level, reflecting both the market's overall trend during that period and the fact that the company's earnings growth has been robust. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
- SUNSTONE HOTEL INVESTORS INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. During the past fiscal year, SUNSTONE HOTEL INVESTORS INC continued to lose money by earning -$0.03 versus -$0.26 in the prior year. This year, the market expects an improvement in earnings ($0.34 versus -$0.03).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Real Estate Investment Trusts (REITs) industry. The net income increased by 123.0% when compared to the same quarter one year prior, rising from $18.78 million to $41.87 million.
- You can view the full analysis from the report here: SHO Ratings Report
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