11:43 AM EDT, 03/11/2024 (MT Newswires) -- Hyatt Hotels' ( H ) risk-reward ratio is now seen as more balanced following a share price rally over the last three months driven by the company's asset-light transformation and business model simplification, Morgan Stanley said in a note Monday.

The firm said its view is supported by Hyatt's high exposure to the recovering urban and group segments, which is being offset partly by volatile trends in China, and the company's ongoing asset-light transition.

"Hyatt's 4Q hit all the right notes, simplifying the structure while delivering core upside and making progress on the shift to asset light. We continue to appreciate the underlying story and see substantial proceeds from asset sales still driving best-in-class FCF/share growth," Morgan Stanley said. "However, with the stock rallying 30% in the past 3 months corresponding to a valuation re-rating, we see a more balanced risk-reward."

Morgan Stanley downgraded the stock to equal-weight from overweight, and raised the price target to $156 from $149.

The stock settled at $156.70 Friday and was down 1.8% in recent trading Monday.

Price: 153.84, Change: -2.86, Percent Change: -1.83