Bryan Maher, an analyst at B.Riley Securities, has downgraded Hersha Hospitality Trust (NYSE: HT) from Buy to Neutral. The upgraded price target is now $10, up from $9.
This downgrade follows the recent announcement of HT’s acquisition by KSL Capital Partners for $10 per share.
The acquisition, which is an all-cash transaction, has a total value of approximately $1.4 billion. This purchase price represents a premium of around 60% compared to Hersha’s closing share price on August 25, 2023.
Equity Fund Buys Hersha Hospitality Trust: Hotel REITs Go Wild
Analyst Bryan Maher had previously speculated that HT could be acquired within the next 12-18 months due to its refined portfolio of predominantly upper upscale and upscale urban and leisure hotels situated in attractive gateway markets.
Maher believes that KSL Capital Partners has extensive expertise in owning hotels and resorts across North America and the Caribbean.
Maher predicts that KSL will retain most of Hersha’s 23 wholly-owned properties, only selling a few of them to generate profit from the assets.
The analyst’s financial outlook for FY24 estimates adjusted EBITDA of $107.0 million and AFFO (Adjusted Funds From Operations) per share of $1.18. For FY25, Maher anticipates adjusted EBITDA of $112.0 million and AFFO per share of $1.30.
Price Action: On Friday, HT shares were trading at $9.85, representing a 0.31% increase.