Park Hotels & Resorts gets bullish upgrade as RevPAR strength continues

Strength in third-quarter RevPAR across the lodging REIT sector and expectations for continued growth prompted Raymond James analyst RJ Milligan to upgrade Park Hotels & Resorts (PK) to Strong Buy from Market Perform, seeing further upside even after the stock’s 48% gain this year.

Milligan believes PK’s valuation remains attractive as several specific EBITDA drivers in 2027 should deliver “outsized EBITDA growth, including the reopening/ramp of Royal Palm and the continued improvement in Hawaii.”

Milligan also set his target price for Park Hotels (PK) at $19 per share, implying a 23% upside to Friday’s closing price.

The upgrade incorporates a more bullish outlook for the entire lodging REIT sector ahead of Q3 results. Milligan anticipates increases to FY26 guidance to reflect EBITDA inflection, a healthy consumer, minimal new supply, and improving sentiment.

“We still see an additional 10-20% upside for the sector from here, which we believe is attractive relative to the other REIT sectors, given the broader interest rate headwinds,” Milligan writes in his note to clients, raising his RevPAR/EBITDA estimates across the board.

Although the fundamentals in the lodging REIT sector hold true for most names in the space, Milligan downgrades RLJ Lodging Trust (RLJ) to Market Perform from Outperform in respect of a “less compelling valuation.”

“While we still see additional upside in RLJ, we believe there are other more attractive risk/reward opportunities within the lodging REIT sector,” Milligan notes.

Shares of Park Hotels & Resorts (PK) are moving higher on Monday, while at the same time, RLJ Lodging Trust is nearly 1% in the red.