DiamondRock Hospitality Company (DRH) Exposure Skewed Toward Higher-End Leisure Demand

We recently compiled a list of the 12 Cheap Small-Cap Stocks to Invest In Before the Next Breakout. DiamondRock Hospitality Company is placed second on our list of best small-cap stocks.

TheFly reported on January 16 that Morgan Stanley analyst Stephen Grambling raised the price target on DRH to $9.00 from $8.50 and maintained an Equal Weight rating. The firm noted that gaming, lodging, and leisure fundamentals were “muted” in 2025, with growth concentrated in areas serving older, wealthier consumers. For 2026, Morgan Stanley expects similar trends, with the additional impact of rates boosting goods relative to services.

Jim Cramer On Omega Healthcare (OHI) Investors: "You’re Right To Be Worried"

In contrast, earlier on January 13, Deutsche Bank upgraded DHR from Hold to Buy and raised the price target to $12 from $10. The firm cited the stock’s relative valuation and company-specific catalysts and noted that DRH’s market exposure and “operator acumen” should support solid RevPAR and EBITDA growth in 2026 and 2027. Deutsche Bank also expects the company’s markets to outperform.

DiamondRock Hospitality Company (NASDAQ:DRH) is a U.S. self‑advised real estate investment trust (REIT) that owns and manages a diversified portfolio of premium hotels and resorts in major gateway cities and leisure destinations.

While we acknowledge the risk and potential of DRH as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than DRH and that has 10,000% upside potential, check out our report about this cheapest AI stock.

READ NEXT: 12 Best Multibagger Stocks to Buy Heading into 2026 and 7 Best Rising Tech Stocks to Buy Now.

Disclosure: None.