On Monday, Citi updated its valuation model for Sunstone Hotel (NYSE:SHO) Investors, listed on the New York Stock Exchange under the ticker NYSE:SHO, resulting in an increased price target. The firm's target for the hotel investment company's shares rose to $11.50, a lift from the previous $10.00, while the analyst maintained a Neutral rating on the stock.
The adjustment follows Sunstone Hotel Investors' recent fourth quarter 2023 results and revised operational assumptions. The new target is based on an estimated 12 times 2024 expected EBITDA multiple, consistent with the company's historical averages. The update also reflects changes in capital allocation after the sale of the Boston Park Plaza asset.
In addition to the price target change, Citi has also revised its core Funds From Operations (FFO) estimates for Sunstone Hotel Investors. The first quarter 2024 core FFO estimate has been increased to $0.18 from $0.17. Moreover, the full-year 2024 core FFO forecast has been adjusted upward to $0.84 from the previous estimate of $0.77.
The revised estimates and price target reflect a detailed analysis of Sunstone's financials and market position. The sale of the Boston Park Plaza asset has been a significant factor in the updated assessments, indicating a shift in the company's capital strategy.
Investors and market observers may consider these updated figures as they evaluate Sunstone Hotel Investors' performance and potential. The new share price target of $11.50 offers a glimpse into the company's valuation through the lens of Citi's financial modeling and industry benchmarks.
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