In a research note this morning, JPMorgan analyst Joseph Greff downgraded Chesapeake Lodging Trust (CHSP), Sunstone Hotel (SHO) and LaSalle Hotel (LHO) to Underweight, a sell-equivalent rating, pointing to recent outperformance, valuation, and fundamentals and outlooks that he still sees as soft.

SELL AFTER OUTPERFORMANCE: In a research note to investors, JPMorgan's Greff downgraded Chesapeake Lodging Trust, Sunstone Hotel and LaSalle to Underweight from Neutral saying the valuations of Lodging REITs are "relatively rich" following the quarter to date outperformance. Prospects of U.S. corporate tax reform eventually stimulating business travel are already reflected in the stocks prices, Greff added. Further, the analyst argued that while investors' expectation for flat to very low single digit RevPAR growth is "the bogey for 2018," he does not see great risk-reward. At the very least, Greff thinks they will be relative underperformers. The analyst kept a $23 price target on Chesapeake Lodging shares, $14 price target on Sunstone's stock, and $24 on LaSalle.

OTHERS TO WATCH: Additionally, JPMorgan's Greff reiterated an Underweight rating on Host Hotels and Resorts (HST) saying that while its valuation and supply growth are relatively favorable compared to the other companies, he is not convinced there are many needle-moving, value creating options available to it. Further, Greff told investors that he is skeptical about a potential leveraged share repurchase announcement any time soon and anywhere near current levels. Meanwhile, the analyst kept an Overweight rating on Park Hotels & Resorts (PK) and a Neutral rating on Ryman Hospitality Properties (RHP). He sees Park Hotels & Resorts as a relative outperformer within the Lodging REITs, with a relatively favorable supply growth mix, peer-low valuation and near peer-high dividend yield, and multiple self-help levers for value creation in 2018. For Ryman Hospitality, the analyst sees a relatively stable book of group business continuing to keep it relatively insulated from RevPAR swings in corporate transient business.

PRICE ACTION: In afternoon trading, shares of Chesapeake Lodging dropped 0.5% to $28.27, while LaSalle was fractionally down to $28.10. Sunstone's stock was fractionally up to $16.32.