Gaylord shares surge on positive analyst ratings

Gaylord shares jumped $1.84, or 7.6 percent, to $26.09 in midday trading. The stock had dropped from an all-time high of $59.89 last August to touch a multiyear low of $23.12 on Tuesday.

Gaylord's stock fell after the Nashville, Tenn.-based company's meeting with investors last week on concerns about high leverage, funding for future projects, rising attrition and weakening demand.

On Tuesday, Morgan Keegan analyst Napoleon Overton said the stock was "substantially undervalued."

"It seems intuitive to us that the stability contributed to Gaylord's business model by substantial advance bookings would be highly valued at this point in the current lodging cycle, given meaningful near-term uncertainties regarding the economy as a whole and the lodging sector specifically," Overton said. "However, Gaylord shares have meaningfully underperformed other lodging stocks during the past 6 months."

Oppenheimer & Co. analyst David Katz also reiterated his "Outperform" rating and said concerns about the company's leverage are unfounded.

"We believe the market has been confused by Gaylord's recent statements that it wishes to 're-equitize' its business--this does not mean, in our view, a desire or need to issue equity," said Wachovia Capital Markets analyst Jeffrey J. Donnelly. "Instead we believe management looks to monetize a portion of its interest in its real estate assets."