On Thursday, Xenia Hotels & Resorts, Inc. (NYSE:XHR) received an upgrade in its stock rating by Jefferies, which shifted the company's status from Hold to Buy. Accompanying this upgrade, the price target for Xenia's shares has been increased from $14.00 to $18.00.
The decision to upgrade Xenia's rating was based on the potential for unrecognized value from the company's recent renovations, which are expected to be completed within the next twelve months.
Jefferies highlighted the company's EBITDA growth, which is projected to shift from a decline of 1.5% to increases of 1.9% and 12% over the years 2023 to 2025, respectively. This growth trajectory is seen as a positive reflection of the improved assets in a favorable fundamental environment.
Jefferies analyst also pointed out the anticipated reduction in leverage and the expected increase in capital returns as additional factors supporting the upgrade. In particular, a significant 20% increase in dividends for the year 2024 was mentioned, with expectations of further progression in the future.
The improved financial outlook for Xenia Hotels & Resorts is tied to the company's strategic investments in its properties, which are now set to yield tangible results.
Xenia Hotels & Resorts, Inc. operates as a real estate investment trust (REIT), focusing on the ownership of luxury and upper upscale hotels and resorts. The company's portfolio includes properties in key U.S. tourism and business destinations.
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