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Sunstone Hotel (SHO) Soars 6.3%: Is Further Upside Left in the Stock?

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Sunstone Hotel Investors (SHO - Free Report) shares rallied 6.3% in the last trading session to close at $10.79. This move can be attributable to notable volume with a higher number of shares being traded than in a typical session. This compares to the stock's 11.8% loss over the past four weeks.

Improving RevPAR, average daily rate and occupancy have been boosting investors’ confidence.

This hotel real estate investment trust is expected to post quarterly earnings of $0.09 per share in its upcoming report, which represents a year-over-year change of +169.2%. Revenues are expected to be $169.44 million, up 234.7% from the year-ago quarter.

Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.

For Sunstone Hotel, the consensus EPS estimate for the quarter has been revised 29.4% lower over the last 30 days to the current level. And a negative trend in earnings estimate revisions doesn't usually translate into price appreciation. So, make sure to keep an eye on SHO going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

Sunstone Hotel is a member of the Zacks REIT and Equity Trust - Other industry. One other stock in the same industry, MGM Growth Properties , finished the last trading session 0.3% higher at $36.47. MGP has returned -5.4% over the past month.

MGM Growth's consensus EPS estimate for the upcoming report has remained unchanged over the past month at $0.67. Compared to the company's year-ago EPS, this represents a change of +11.7%. MGM Growth currently boasts a Zacks Rank of #3 (Hold).

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