Canaccord Genuity Inc. analyst cut hisinvestment opinion of StarwoodHotels & Resorts Worldwide Inc. to "hold" from"buy," and decreased his price target to $86 from $88.
The analyst wrote in a research report: "We believe HOTshares continue to offer upside as we see considerable upside to shares ofMarriott following the merger. HOT shares only trade at about a 1% discount tothe combined valuation of MAR, ILG and the cash considerations in the pendingmergers. As such, we don't see any relative outperformance vs. MAR prior toclosing. However, HOT share downside potential exists associated with the ILGtransaction as loan loss provisions across the timeshare industry have spookedinvestors. We don't cover ILG, but this uncertainty could be reason to rotateout of HOT and into MAR, now that the HOT valuation is just 1% below thecombined valuation of the merger contracts. While we believe HOT shares offerupside, driving our $86 price target, that upside is not material enough for usto continue to recommend the stock, given the aforementioned uncertainty acrossthe timeshare industry."