Sunstone Hotel upgraded to Equal Weight at Morgan Stanley in lodging shake-up

As previously reported, Morgan Stanley upgraded Sunstone Hotel to Equal Weight from Underweight with a price target of $10, up from $9. The firm cites better competitive supply in the company’s markets and lower leverage levels for the upgrade. The firm’s latest company RevPAR tracker showed most of the lodging C-Corps trending below consensus 2Q estimates in North America, but international trends should act as an offset for several of them, the analyst tells investors in a lodging group note. Morgan Stanley continues to prefer lodging C-Corps over REITs in the current environment given C-Corp’s less cyclical business model and lower operating and financial leverage, the analyst added.