On Friday, JPMorgan (NYSE:JPM) downgraded shares of Ryman Hospitality Properties (NYSE:RHP), a real estate investment trust (REIT), from Neutral to Underweight. The firm maintained its year-end 2025 price target for the stock at $100.00. The adjustment follows a period during which the company's shares have seen significant appreciation, rising approximately 15% over the last three months.
The JPMorgan analyst noted that the recent increase in Ryman Hospitality's share price has led to what the firm believes is an unattractive and unsustainable valuation multiple. The firm suggests that the stock is trading at multiples that are considered high, even for a lodging REIT specialized in group and convention-focused properties.
For investors looking for yield from REITs, JPMorgan recommends considering Gaming and Leisure Properties Inc. (NASDAQ:GLPI), which offers a higher and, in their view, safer yield of 6.1%, compared to Ryman's 3.8%. The analyst highlighted that Ryman Hospitality is currently trading at 13.9 times its 2024 estimated enterprise value to EBITDA (EV/EBITDA) and 13.4 times its 2025 estimates, which they consider rich for the sector.
The firm's stance reflects a cautious outlook on Ryman Hospitality's valuation, despite the company's focus on a niche area of the lodging REIT market. The analyst's comments underscore the firm's preference for REITs with more attractive yield prospects, such as GLPI, over Ryman Hospitality at its current valuation.
The maintained price target of $100.00 until the end of 2025 indicates that JPMorgan does not foresee significant growth in Ryman Hospitality's stock price over the next two years, given the current market conditions and the company's valuation metrics.
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