The firm said that the hotel industry's demand appears to be slowing relative to the growth of supply in the lodging sector. The sector's multiples are also beginning to be pressured by "disruptive technologies," Goldman noted.
The Irving, TX-based hotel chain owner and operator has "limited growth in the near-to-intermediate term, low returns and an uncompelling valuation," the firm wrote in a note cited by the Fly.
La Quinta is also facing more competition and could have to invest more into its hotels, Goldman said.
Additionally, Morgan Stanley said earlier today that the lodging sector faces "numerous industry-specific headwinds."
The firm lowered its forecast for 2017 revenue per available room (RevPAR) growth to 1% from 2.4% for the U.S. market. In 2018, the firm expects RevPAR to fall 1% vs. its prior view for an increase of 1.5%.
Morgan Stanley has an "equal weight" rating and $11 price target on La Quinta stock.
About 2.07 million of the company's shares traded hands on Monday vs. the 30-day average volume of roughly 799,000 shares.
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 "hold" with a ratings score of C.
The company's strengths can be seen in multiple areas, such as its growth in earnings per share, increase in net income and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, generally higher debt management risk and disappointing return on equity.
You can view the full analysis from the report here: LQ