Jefferies Reports Lodging Stocks Show Improvement
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Jefferies notes that lodging stocks tied to moderate to lower-end brands are outperforming due to economic stability, while higher-end brands are underperforming amid slower leisure travel and delayed interest rate cuts.
The DJIA rose 228 points but Nasdaq was down 92 while the S&P 500 was up 7 points and the 10-year treasury yield was down .03 to 3.62%. Lodging stocks were mixed.
Jefferies said the performance of lodging stocks quarter to date suggests the market is pricing in a more stable economy. Large-cap and small to midcap lodging names are up around 4.7%, with HLT, CHH, and WH up 9.4%, 9.8%, and 10.9%, respectively. Jefferies said their outperformance is noted due to their orientation towards moderate to lower-end brands, which had been the area of greatest concern in the consumer economy. Those tied to the higher end, namely MAR, H, HST, and PK, continue to see their stock prices underperform. Jefferies said they believe this is the result of a deceleration in higher-end leisure transient travel but also, in the case of REITs, is likely resulting from the deferral and solidifyi
