Wells double upgrades Service Properties on disposition progress

Wells Fargo upgraded Service Properties (SVC) to Overweight from Underweight with a price target of $4, up from $2.50, implying 60% upside. Over the next month, the firm expects progress towards the company’s $1.1B in dispositions to be announced, with closings commencing in Q2. Following multiple discussions with management and an independent broker check-in, Wells now has comfort that Service Properties’ $1.1B disposition plan is on track and “should be more clearly inked in the next month.” The firm views the pitch of acquiring hotels unencumbered by management with all-in pricing below replacement as attractive.