The Bethesda, MD-based company is a self-managed and self-administered real estate investment trust (REIT).
Barclays also downgraded REIT RLJ Lodging Trust (RLJ) to "underweight" from "equal weight" and lowered its price target to $25 from $30.
The downgrades come after the firm reviewed 2015 trends and looked into 2016 and identified these companies as potentially being disproportionately affected by some of the headwinds facing the lodging industry.
"LHO's gateway market, CBD focused portfolio could face continued headwinds due to fixed income, Airbnb and supply growth while RLJ has significant exposure to Houston (lower oil demand, high supply growth) and other high supply growth markets (NYC, Denver, Austin)," the firm said in an analyst note.
Shares of LaSalle Hotel Properties are down by 3.40% to $25.31 on heavy trading volume on Friday afternoon. About 2.45 million of the company's shares have been traded today, compared to its average volume of 1.23 million.
Shares of RLJ Lodging Trust are also in the red by 3.97% to $22 late Friday afternoon.
Separately, recently, 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 has this to say about the recommendation:
We rate LASALLE HOTEL PROPERTIES as a Buy with a ratings score of B-. 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 revenue growth, reasonable valuation levels, good cash flow from operations and expanding profit margins. We feel its strengths outweigh the fact that the company has had sub par growth in net income.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- LHO's revenue growth has slightly outpaced the industry average of 6.1%. Since the same quarter one year prior, revenues slightly increased by 7.5%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- Net operating cash flow has slightly increased to $101.99 million or 7.92% when compared to the same quarter last year. Despite an increase in cash flow, LASALLE HOTEL PROPERTIES's average is still marginally south of the industry average growth rate of 9.39%.
- 43.69% is the gross profit margin for LASALLE HOTEL PROPERTIES which we consider to be strong. Regardless of LHO's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, LHO's net profit margin of 14.34% is significantly lower than the industry average.
- LASALLE HOTEL PROPERTIES has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, LASALLE HOTEL PROPERTIES increased its bottom line by earning $1.88 versus $0.73 in the prior year. For the next year, the market is expecting a contraction of 39.9% in earnings ($1.13 versus $1.88).
- You can view the full analysis from the report here: LHO