The firm also trimmed its price target on Hyatt stock to $46 from $49.
The downgrade is due to the hospitality company's "ownership-heavy model," Morgan Stanley said.
Hyatt has significant exposure to gateway cities, which "offsets the strong unit growth on its smaller fee-based business," the firm noted.
Morgan Stanley lowered its forecast for 2017 revenue per available room (RevPAR) growth for U.S. lodging companies to 1% from 2.4% previously. In 2018, the firm sees RevPAR declining 1% vs. its prior view of a 1.5% increase.
Additionally, shares of the Chicago-based company were initiated with a "neutral" rating and $50 price target this morning at Goldman Sachs, the Fly reports.
Separately, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author.
TheStreet Ratings rated this stock as a "buy" with a ratings score of B.
The company's strengths can be seen in multiple areas, such as its increase in net income, revenue growth, largely solid financial position with reasonable debt levels by most measures, good cash flow from operations and growth in earnings per share. We feel its strengths outweigh the fact that the company has had somewhat disappointing return on equity.
You can view the full analysis from the report here: H