Sunstone Hotel Investors (SHO) has disclosed a new risk, in the Share Price & Shareholder Rights category.
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Sunstone Hotel Investors’ board has sanctioned a stock buyback scheme with a $500 million cap, which, while not compulsory, could be curtailed or halted anytime. While aimed at boosting shareholder value, such repurchases may inject volatility into Sunstone’s stock prices and artificially inflate them. Moreover, executing the program risks depleting the company’s cash reserves, potentially hampering future investments and strategic initiatives. There is no guarantee that these repurchases will prove beneficial to stockholder value, especially if stock prices subsequently fall below repurchase levels.
The average SHO stock price target is $10.40, implying -6.39% downside potential.
To learn more about Sunstone Hotel Investors’ risk factors, click here.