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On Monday, B. Riley adjusted its stance on Xenia Hotels & Resorts (NYSE:), changing its rating from “buy” to “neutral” and raising its price target on the stock to $17 from $16. Ta.
The revisions came after the company's stock price rose significantly, rising 18.6% over the past month and 34.7% over the past five months. This performance contrasts with growth of 3.9% and 19.8% in the same period.
The analyst cited the stock's recovery to near fair value as the main reason for the downgrade. Zegna's recent stock price surge has been attributed to a combination of aggressive share buybacks carried out at attractive prices in the fourth quarter of 2023, and a reduction in the number of outstanding shares. Other factors include the easing of interest rates and the steady, albeit slowing, growth in demand for lodging.
The lodging real estate investment trust (REIT) currently trades at approximately 11.5 times estimated 2024 EBITDA, a valuation that is in line with B. Riley's target multiple for Ksenia. The new $17 price target is based on the company's latest EBITDA estimate for Q2 2025. Despite the downgrade, Zegna's outlook is considered positive, especially after completing a major renovation and rebranding of the Hyatt Regency Scottsdale. Improve overall portfolio performance.
The analyst noted that business and group demand is on the rise in the post-pandemic world, while leisure demand is starting to level off after remaining strong from Q2 2021 to Q1 2023. did. Zegna's management team has been proactive. Capital deployment, stock and debt repurchases during the past year. The analyst suggested that this trend could slow as stock valuations approach more robust levels, making a potential decline in stock prices a more attractive entry point for investors. He suggested that there was.
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