UPDATE: Stifel Upgrades CommonWealth REIT on Review of Expected Outcomes

In a report published Tuesday, Stifel analyst John Guinee upgraded the rating on CommonWealth REIT (NYSE: CWH) from Sell to Hold.

In the report, Stifel noted, “We are expanding our range of expected outcomes and upgrading CommonWealth to Hold, from Sell. Possible scenarios include 1) a clean Corvex/Related (C&R) victory, a top notch Board and C suite, and a liquidation strategy the Street endorses ($25.00/sh or a 7.8% Cap Rate), 2) a clean C&R victory and a less than stellar, grind-it-out management team ($22.00/sh or a 8.4% Cap Rate), 3) a CWH/RMR victory, but with negotiated changes such as an expanded Board and a new C suite ($20.00/sh or a 8.8% Cap Rate), and 4) a CWH/RMR victory with RMR as internal manager or business as usual ($18.00/sh or a 9.3% Cap Rate). Also possible, now would be a good time for all parties to negotiate a settlement (scenario 5). Perhaps splitting the company (portfolio) would be an elegant solution with C&R essentially controlling the less desirable assets. We would not be surprised to see this happen.”

CommonWealth REIT closed on Monday at $22.83.