On Monday, Baird made an adjustment to the price target for Ashford Hospitality Trust (NYSE:AHT), bringing it down to $2.00 from the previous $3.00. The investment firm has chosen to maintain a Neutral rating on the stock. The revision comes amidst the company's ongoing efforts to sell assets, which is anticipated to lead to the complete repayment of the Oaktree term loan by the end of the third quarter of 2024.
The analyst at Baird pointed out that while Ashford (NYSE:AINC) Hospitality Trust is moving forward with asset sales, the balance sheet remains heavily burdened by debt. To position the company for potential future growth, the analyst believes that further asset disposals will be necessary, along with an increase in equity within the company's capital structure.
The current market conditions, characterized by high interest rates, are expected to continue exerting pressure on the stock price. The analyst indicated that until there is a change in the company's capital allocation flexibility, the stock is likely to face ongoing challenges.
Ashford Hospitality Trust is working towards improving its financial position through strategic asset sales. The full repayment of the Oaktree term loan by the end of the third quarter of 2024 would mark a significant milestone in this process.
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