Service Properties Trust (NASDAQ:SVC) Lowered to "Sell" Rating by Wall Street Zen

Key Points

• Wall Street Zen downgraded Service Properties Trust (NASDAQ:SVC) from “hold” to “sell,” adding to a mixed analyst picture that currently leaves the stock with a consensus “Hold” rating and an average target price of $2.50.
• The REIT reported better-than-expected quarterly results, posting EPS of $0.04 versus expectations for a loss, and revenue of $364.45 million versus $347.82 million estimated.
• Despite the earnings beat, Service Properties Trust remains under pressure with a small market cap, heavy leverage, and weak liquidity; the stock closed at $1.64, below its 200-day average of $1.89, while insiders have been buying shares recently.

Service Properties Trust (NASDAQ:SVC - Get Free Report) was downgraded by equities researchers at Wall Street Zen from a "hold" rating to a "sell" rating in a research report issued to clients and investors on Saturday.

Other equities analysts have also recently issued research reports about the stock. Wells Fargo & Company decreased their target price on shares of Service Properties Trust from $2.50 to $2.00 and set an "equal weight" rating on the stock in a research report on Thursday, January 22nd. Odeon Capital Group started coverage on shares of Service Properties Trust in a research report on Friday. They issued a "buy" rating and a $3.50 target price on the stock. Zacks Research cut shares of Service Properties Trust from a "strong-buy" rating to a "hold" rating in a research report on Friday, January 30th. Weiss Ratings restated a "sell (d-)" rating on shares of Service Properties Trust in a research report on Tuesday, April 21st. Finally, B. Riley Financial upgraded shares of Service Properties Trust from a "neutral" rating to a "buy" rating and set a $2.00 price objective on the stock in a research report on Thursday, April 2nd. Two equities research analysts have rated the stock with a Buy rating, two have issued a Hold rating and one has assigned a Sell rating to the company's stock. According to data from MarketBeat.com, the stock has a consensus rating of "Hold" and an average target price of $2.50.

Service Properties Trust Price Performance

Shares of NASDAQ:SVC opened at $1.64 on Friday. The stock has a market cap of $275.60 million, a PE ratio of -1.15 and a beta of 1.61. The company's fifty day moving average is $1.73 and its 200 day moving average is $1.89. Service Properties Trust has a 52 week low of $1.13 and a 52 week high of $3.08. The company has a quick ratio of 0.14, a current ratio of 0.01 and a debt-to-equity ratio of 4.56.

Service Properties Trust (NASDAQ:SVC - Get Free Report) last issued its earnings results on Wednesday, May 6th. The real estate investment trust reported $0.04 EPS for the quarter, topping analysts' consensus estimates of ($0.36) by $0.40. The company had revenue of $364.45 million for the quarter, compared to analysts' expectations of $347.82 million. Service Properties Trust had a negative net margin of 13.59% and a negative return on equity of 38.18%. Service Properties Trust has set its FY 2026 guidance at 0.240-0.270 EPS. Research analysts anticipate that Service Properties Trust will post 0.25 earnings per share for the current year.

Insider Activity at Service Properties Trust

In related news, Director Adam D. Portnoy purchased 41,666,666 shares of Service Properties Trust stock in a transaction that occurred on Thursday, April 2nd. The shares were bought at an average price of $1.20 per share, for a total transaction of $49,999,999.20. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which is available through the SEC website. Also, CEO Christopher J. Bilotto purchased 100,000 shares of Service Properties Trust stock in a transaction that occurred on Thursday, April 2nd. The shares were bought at an average price of $1.20 per share, for a total transaction of $120,000.00. The SEC filing for this purchase provides additional information. Insiders have bought 41,914,999 shares of company stock valued at $50,297,999 over the last three months. Corporate insiders own 1.57% of the company's stock.

Hedge Funds Weigh In On Service Properties Trust

Several hedge funds and other institutional investors have recently modified their holdings of the stock. Abel Hall LLC increased its position in shares of Service Properties Trust by 69.3% during the first quarter. Abel Hall LLC now owns 29,395 shares of the real estate investment trust's stock valued at $40,000 after buying an additional 12,033 shares during the period. AdvisorShares Investments LLC purchased a new stake in shares of Service Properties Trust in the 1st quarter worth about $44,000. Inspire Investing LLC grew its position in shares of Service Properties Trust by 49.2% in the 1st quarter. Inspire Investing LLC now owns 386,912 shares of the real estate investment trust's stock worth $524,000 after buying an additional 127,587 shares during the period. Tudor Investment Corp ET AL grew its position in shares of Service Properties Trust by 183.7% in the 4th quarter. Tudor Investment Corp ET AL now owns 568,635 shares of the real estate investment trust's stock worth $1,046,000 after buying an additional 368,183 shares during the period. Finally, Readystate Asset Management LP increased its stake in shares of Service Properties Trust by 49.1% in the 4th quarter. Readystate Asset Management LP now owns 3,397,015 shares of the real estate investment trust's stock worth $6,251,000 after acquiring an additional 1,119,181 shares in the last quarter. Hedge funds and other institutional investors own 77.62% of the company's stock.

Service Properties Trust Company Profile

Service Properties Trust NASDAQ: SVC is a real estate investment trust (REIT) specializing in the acquisition, ownership and leasing of service-oriented properties, with a primary focus on the lodging sector. The company structures long-term, triple-net leases with established hotel operators under franchise agreements with leading global brands. By partnering with recognized hotel companies, Service Properties Trust seeks to generate a stable income stream through rent payments, while offering operators the capital and balance-sheet flexibility to grow their portfolios.

Since its formation in 2010, Service Properties Trust has grown its portfolio through strategic sale-leaseback transactions, targeted property acquisitions and selective dispositions.

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