Merrill Lynch downgraded Four Seasons (FS

) to sell from neutral.

Analyst David Anders says the downgrade was based on valuation, and the belief that an economic slowdown is having a more pronounced effect on the company's earnings. He cut the 92 cents 2003 earnings per share estimate to 75 cents, and sees lower management fees as a result of lower revenue per available growth growth forecast in 2003 (1% vs. the 2% prior estimate), and greater operating losses at its owned properties.

Anders notes, not only are many of Four Seasons' properties currently exposed to a geopolitical risk, but much of its future growth is in emerging markets, where this type of risk is high. He says Four Seasons also is facing several owner/manager disputes in emerging market areas.