Growing Through Challenges? – DiamondRock Hospitality Company (DRH)

DE Stock
DE Stock

Fidelity Management & Research Co.. recently announced the acquisition of new stake in DiamondRock Hospitality Company (NYSE:DRH). The institutional investor has increased its shareholding in the Real Estate company by 3.05% to 11.83 million shares with purchase of 0.35 million shares. This fresh investment now brings its stake to 5.94% valued currently at $54.66 million. In addition, Principal Global Investors LLC raised its holdings by 4.8 million to 6.34 million shares.

With over 1.83 million DiamondRock Hospitality Company (DRH) shares trading Monday and a closing price of $5.30 on the day, the dollar volume was approximately $9.72 million. The shares have shown a positive weekly performance of 0.76% and its price on 08/31/20 lost nearly -5.86%. Currently, there are 200.80M common shares owned by the public and among those 196.00M shares have been available to trade.

An analysis of what Wall Street brokers have to say about the expected price targets for this stock gives us this picture: 13 analysts who have offered their price forecasts for DRH have a consensus price objective of $5.73. The analysts have set the share’s price value over the next 12 months at a high of $8.00 and a low of $4.00 should the stock experience a downside. Incidentally, analysts’ outlook for the DiamondRock Hospitality Company stock is 3.20 for the next 12 months. The average price target is 7.5% above its last price level and an upside to the estimated low will see the stock lose -32.5% over that period. But an upside of 33.75% will see the stock hit the forecast high price target while mean target price for the stock is $5.50.

Insiders at the company have transacted a total of 25 times over the past 12 months, according to data filed with the U.S. Securities and Exchange Commission (SEC). 23 of these insider trades were purchases, accounting for 746,482 shares. Insider sales of the common stock occurred on 2 occasions, with total insider shares sold totaling 27,393 shares.

The top 3 mutual fund holders in DiamondRock Hospitality Company are iShares Core S&P Small Cap ETF, Fidelity Japan Fidelity US REIT M, and Vanguard Real Estate Index Fund. iShares Core S&P Small Cap ETF owns 12.42 million shares of the company’s stock, all valued at over $57.36 million. The company bought an additional 44352.0 shares recently to bring their total holdings to about 6.23% of the shares outstanding. Fidelity Japan Fidelity US REIT M bought 4.21 million shares to see its total holdings expand to 10.88 million shares valued at over $50.26 million and representing 5.46% of the shares outstanding. Vanguard Real Estate Index Fund sold 25822.0 shares to bring its total holdings to over 8.94 million shares at a value of $41.28 million. Vanguard Real Estate Index Fund now owns shares totaling to 4.49% of the shares outstanding.

Shares of DiamondRock Hospitality Company (NYSE: DRH) opened at $5.57, down -$0.06 from a prior closing price of $5.63. However, the script later closed the day at $5.30, down -5.86%. The company’s stock has a 5-day price change of 0.76% and -12.40% over the past three months. DRH shares are trading -52.17% year to date (YTD), with the 12-month market performance down to -44.03% lower. It has a 12-month low price of $1.96 and touched a high of $11.79 over the same period. Currently, 1.83 million shares have been traded, compared to an average intraday trading volume of 3.28 million shares. The stock is trading above its simple moving averages at the SMA20, SMA50, and SMA200, as the current price level is off by 1.18%, 2.04%, and -26.69% respectively.

Institutional ownership of DiamondRock Hospitality Company (NYSE: DRH) shares accounts for 96.30% of the company’s 200.80M shares outstanding. Mutual fund holders own 4.81%, while other institutional holders and individual stakeholders account for 65.61% and 38.33% respectively.

It has a market capitalization of $1.03B and a beta (3y monthly) value of 1.70. The stock’s trailing 12-month PE ratio is 28.96, while the earnings-per-share (ttm) stands at $0.18. The company has a debt-to-equity ratio at 0.64. Price movements for the stock have been influenced by the stock’s volatility, which stands at 4.53% over the week and 5.75% over the month.

Analysts forecast that DiamondRock Hospitality Company (DRH) will achieve an EPS of -$0.3 for the current quarter, -$0.24 for the next quarter and -$0.3 for 2021. The lowest estimate earnings-per-share for the quarter is -$0.34 while analysts give the company a high EPS estimate of -$0.26. Comparatively, EPS for the current quarter was $0.07 a year ago. Earnings per share for the fiscal year are expected to increase by 112.40%, and 71.70% over the next financial year. EPS should shrink at an annualized rate of -9.50% over the next five years, compared to 1.70% over the past 5-year period.

If you are looking to buy this stock, then you may note that the average analyst recommendation by 13 brokerage firm advisors rate DiamondRock Hospitality Company (DRH) as a “Hold” at a consensus score of 3.20. Specifically, 2 Wall Street analysts polled rate the stock as a buy, while 4 of the 13 advise that investors “hold,” and 5 rated it as a “Sell.”

Looking at the support for the DRH, a number of firms have released research notes about the stock. SunTrust stated their Sell rating for the stock in a research note on July 24, 2020, with the firm’s price target at. Barclays coverage for the DiamondRock Hospitality Company (DRH) stock in a research note released on June 22, 2020 offered a Overweight rating with a price target of $8. Wells Fargo was of a view on April 07, 2020 that the stock is Equal Weight, while Citigroup gave the stock Sell rating on April 07, 2020, issuing a price target of $10.50- $4. KeyBanc Capital Markets on their part issued Sector Weight rating on December 17, 2019.


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