Evercore ISI lifts Sunstone Hotel Investors Inc. [SHO] price estimate. Who else is bullish?



Sunstone Hotel Investors Inc. [NYSE: SHO] gained 1.41% or 0.17 points to close at $12.23 with a heavy trading volume of 3945314 shares. The company report on May 4, 2022 that SUNSTONE HOTEL INVESTORS TO ACQUIRE THE CONFIDANTE MIAMI BEACH AND REPOSITION AS ANDAZ MIAMI BEACH.

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Sunstone Hotel Investors, Inc. (the “Company” or “Sunstone”) (NYSE: SHO), the owner of Long-Term Relevant Real Estate® in the lodging industry, announced that it has entered into a definitive agreement with an affiliate of Hyatt Hotels Corporation to acquire the 339-room The Confidante Miami Beach (the “Hotel”), located on 1.5 acres of fee-simple, oceanfront land in Miami Beach for a purchase price of $232 million, or $684,000 per key. Following the acquisition, the Company expects to pursue a full transformation of the property and a rebranding of the Hotel to Andaz Miami Beach.

The purchase price represents a 17.3x multiple on 2022 forecasted hotel EBITDA and a 5.0% capitalization rate on 2022 forecasted hotel net operating income. In addition to the purchase price, Sunstone expects to invest approximately $60 million to reposition the Hotel into a premiere beachfront resort under Hyatt’s luxury, lifestyle Andaz brand. Upon completion of the renovation, the Company expects the Hotel to generate an 8% to 9% stabilized net operating income yield on the total investment in the Hotel, including the planned repositioning. The acquisition will be funded through a combination of cash on hand and from borrowing on the Company’s currently undrawn revolving credit facility.

It opened the trading session at $12.11, the shares rose to $12.27 and dropped to $11.74, the range by which the price of stock traded the whole day. The daily chart for SHO points out that the company has recorded -3.32% loss over the past six months. However, it is still -23.16% lower than its most recent low trading price.

If we look at the average trading volume of 4.21M shares, SHO reached to a volume of 3945314 in the most recent trading day, which is why market watchdogs consider the stock to be active.

Here is what top equities market gurus are saying about Sunstone Hotel Investors Inc. [SHO]:

Based on careful and fact-backed analyses by Wall Street experts, the current consensus on the target price for SHO shares is $12.33 per share. Analysis on target price and performance of stocks is usually carefully studied by market experts, and the current Wall Street consensus on SHO stock is a recommendation set at 2.90. This rating represents a strong Buy recommendation, on the scale from 1 to 5, where 5 would mean strong sell, 4 represents Sell, 3 is Hold, and 2 indicates Buy.

Evercore ISI have made an estimate for Sunstone Hotel Investors Inc. shares, keeping their opinion on the stock as Outperform, with their previous recommendation back on March 01, 2022. While these analysts kept the previous recommendation, Barclays dropped their target price from $15 to $11. The new note on the price target was released on March 01, 2022, representing the official price target for Sunstone Hotel Investors Inc. stock. Previously, the target price had yet another raise from $13 to $14, while Morgan Stanley kept a Overweight rating on SHO stock. On January 10, 2022, analysts decreased their price target for SHO shares from 14 to 12.

The Average True Range (ATR) for Sunstone Hotel Investors Inc. is set at 0.41, with the Price to Sales ratio for SHO stock in the period of the last 12 months amounting to 5.45. The Price to Book ratio for the last quarter was 1.39, with the Price to Cash per share for the same quarter was set at 0.53.

Trading performance analysis for SHO stock

Sunstone Hotel Investors Inc. [SHO] fell into the red zone at the end of the last week, falling into a negative trend and dropping by -1.69. With this latest performance, SHO shares gained by 3.38% in over the last four-week period, additionally sinking by -3.32% over the last 6 months – not to mention a drop of -3.47% in the past year of trading.

Overbought and oversold stocks can be easily traced with the Relative Strength Index (RSI), where an RSI result of over 70 would be overbought, and any rate below 30 would indicate oversold conditions. An RSI rate of 50 would represent a neutral market momentum. The current RSI for SHO stock in for the last two-week period is set at 55.85, with the RSI for the last a single of trading hit 55.04, and the three-weeks RSI is set at 55.55 for Sunstone Hotel Investors Inc. [SHO]. The present Moving Average for the last 50 days of trading for this stock 11.50, while it was recorded at 12.27 for the last single week of trading, and 11.67 for the last 200 days.

Sunstone Hotel Investors Inc. [SHO]: A deeper dive into fundamental analysis

Operating Margin for any stock indicates how profitable investing would be, and Sunstone Hotel Investors Inc. [SHO] shares currently have an operating margin of -15.23 and a Gross Margin at +0.36. Sunstone Hotel Investors Inc.’s Net Margin is presently recorded at +6.74.

Return on Equity for this stock inclined to 1.61, with Return on Assets sitting at 1.14.

Sunstone Hotel Investors Inc.’s liquidity data is similarly interesting compelling, with a Quick Ratio of 1.60 and a Current Ratio set at 1.60.

Sunstone Hotel Investors Inc. [SHO]: An earnings per share (EPS) analysis

The progress of the company may be observed through the prism of EPS growth rate, while Wall Street analysts are focusing on predicting the 5-year EPS growth rate for SHO. When it comes to the mentioned value, analysts are expecting to see the 5-year EPS growth rate for Sunstone Hotel Investors Inc. go to 19.90%.

An analysis of insider ownership at Sunstone Hotel Investors Inc. [SHO]

There are presently around $2,703 million, in the hands of institutional investors. The top three institutional holders of SHO stocks are: VANGUARD GROUP INC with ownership of 32,275,293, which is approximately 1.019% of the company’s market cap and around 0.70% of the total institutional ownership; BLACKROCK INC., holding 21,161,027 shares of the stock with an approximate value of $255.2 million in SHO stocks shares; and PRICE T ROWE ASSOCIATES INC /MD/, currently with $154.28 million in SHO stock with ownership of nearly -6.952% of the company’s market capitalization.

Positions in Sunstone Hotel Investors Inc. stocks held by institutional investors increased at the end of May and at the time of the May reporting period, where 125 institutional holders increased their position in Sunstone Hotel Investors Inc. [NYSE:SHO] by around 31,343,629 shares. Additionally, 97 investors decreased positions by around 19,440,299 shares, while 17 investors held positions by with 173,369,413 shares. The mentioned changes placed institutional holdings at 224,153,341 shares, according to the latest SEC report filing. SHO stock had 30 new institutional investments in for a total of 4,457,521 shares, while 23 institutional investors sold positions of 1,317,437 shares during the same period.