Service Properties (SVC – Research Report), the Real Estate sector company, was revisited by a Wall Street analyst today. Analyst Bryan Maher from B.Riley Financial remains neutral on the stock and has a $12.00 price target.
Bryan Maher’s rating for Service Properties Trust (SVC) is based on a combination of factors. The analyst perceives the ongoing renovations within SVC’s hotel portfolio as a short-term disruption, which has led to a downward revision of the 2024 RevPAR outlook from 4.5% to 3.0%. Additionally, Maher anticipates higher interest expenses due to significant upcoming debt maturities in 2024 and 2025. Despite the increased interest rates, Maher notes that SVC has a substantial cash reserve and a range of unencumbered assets, which can be leveraged to issue secured debt, thus mitigating potential refinancing issues.
In the second part of his analysis, Maher highlights the potential misvaluation of SVC by investors. He suggests that the company’s valuation should resonate more with the net lease REIT multiple rather than the pure lodging REIT multiple, given that a significant portion of SVC’s portfolio comprises net lease assets. Based on these factors, Maher maintains a Buy rating for SVC and adjusts the price target from $13 to $12, reflecting the company’s robust balance sheet, significant portfolio value, and the perceived undervaluation of its net lease assets.
According to TipRanks, Maher is an analyst with an average return of -1.0% and a 47.15% success rate. Maher covers the Real Estate sector, focusing on stocks such as Braemar Hotels & Resorts, Office Properties Income, and Plymouth Industrial Reit.
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Service Properties (SVC) Company Description:
Service Properties Trust is a real estate investment trust that provides services in hospitality and in travels. It operates through the following business segments: hotel investments and travel center investments. The firm owns hotels and travel centers located throughout the U.S., Ontario, Canada, and Puerto Rico. The company was founded by Barry M. Portnoy on February 7, 1995 and is headquartered in Newton, MA.
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