Key Highlights

● Park Hotels & Resorts (PK) closed at $15.72 on Monday, up from $15.43, a gain of about 1.9%.

● Raymond James analyst RJ Milligan upgraded the hotel REIT from Market Perform to Strong Buy with a $19 price target.

● The analyst cited improved RevPAR estimates, the reopening of the Royal Palm, Hawaii improvement and expected 2027 EBITDA growth.

● Raymond James also downgraded RLJ Lodging Trust to Market Perform from Outperform, citing valuation rather than operations.

Park Hotels & Resorts (NYSE:PK) rose on Monday, September 28, closing at $15.72 against $15.43 on Friday, a gain of about 1.9%, after Raymond James (NYSE:RJF) upgraded the hotel real estate Investment trust, or REIT, two notches to Strong Buy from Market Perform. Analyst RJ Milligan set a price target of $19, about 23% above Friday's close.

The Reasons Behind the Call

According to reports on the note, Milligan pointed to improved estimates for Revenue per available room, or RevPAR, the industry's key measure, which combines how full hotels are with how much they charge. He also cited the reopening and ramp-up of the Royal Palm resort in South Beach, Miami, continued improvement in Hawaii, and expected growth in 2027 Earnings before interest, taxes, Depreciation and amortization. Those are Raymond James' views; actual results will be confirmed when Park reports.

The reports added that the shares had already gained about 48% this year before the upgrade and that Milligan expects lodging REITs broadly to offer further upside, helped by resilient Demand and limited new supply. Strong Buy is Raymond James' highest rating, and skipping the Outperform step is what made this a two-notch move.

About 4.9 million Park shares changed hands on Monday, up from about 3.0 million on Friday, per exchange data. Other analysts were more cautious around the same time, according to market data: Truist held a Hold rating with a $17 target, while BMO Capital had earlier upgraded to Outperform with an $18 target.

Not Every Hotel Stock Got the Same Call

On the same day Raymond James downgraded RLJ Lodging Trust (NYSE:RLJ) to Market Perform from Outperform, citing valuation rather than operations. The split shows the firm choosing between hotel owners rather than making a blanket bet on the group.

Rising Against the Rate Tide

REITs pay out most of their Taxable Income as dividends, which makes them sensitive to interest rates. The Bond Market kept flashing warning signs, with the 10-year Yield at its highest since 2007 and the 30-year at its highest since 2004, which raises discount rates across the stock market. Geopolitics fed the rate story: after President Trump rejected Iran's proposal on the Strait of Hormuz, oil moved higher, with West Texas Intermediate near $92.60 a barrel. Selling was broad. The S&P 500 shed 59.72 points to close at 7,683.69, the Dow surrendered 347.11 points to finish at 51,481.51, and the Nasdaq Composite gave up 248.34 points to end at 26,820.38.

What to Watch for Park Hotels

Park's next Quarterly Report will be the real test of the upgrade, particularly RevPAR, early results from the Royal Palm and commentary on Hawaii and on bookings. Analysts will also watch for any move in the company's own guidance.

JOLTS Job Openings and consumer confidence arrive on Tuesday, the PCE Inflation gauge on Wednesday, the ISM Manufacturing survey on Thursday and the September jobs report on Friday. Consumer confidence matters for leisure travel, and rates matter for REIT valuations.