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Janney Boosts PT on Starwood (HOT) to $68; Q4 Mixed, Easier Comps Expected in H213

February 11, 2013 7:24 AM EST Send to a Friend
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Janney is reiterating its Buy rating on Starwood Hotels (NYSE: HOT), moving its fair value estimate from $67 up to $68 following Q4 results issued last Thursday.

Revs of $1.53 billion and adjusted EBITDA of $325 million compared with consensus views calling for revs of $1.49 billion and adjusted EBITDA of $296 million. Worldwide RevPAR rose 4.1 percent, to the low-end of internal estimates. Management said Q4 worldwide RevPAR results were pressured by market-specific forces rather than structural issues.

Starwood sees China RevPAR ending near the high-end of its five to seven percent outlook. Comps should become easier on the latter-half of 2013 and supply and demand imbalances will also begin to subside. Starwood plans to bolster is presence by 30 hotels for a total of 139 by the end of 2013.

Analyst Brian McGill and team see Starwood benefiting from improved lodging outlook for 2013. He noted that results in the owned segment were "underwhelming." Reasoning could be that the portfolio makes up just five percent of total rooms, leaving it open to higher volatility and individual market issues.

McGill also explains that, while Starwood repurchased 3.5 million shares in the quarter, total share count is still above where it was at the end of 2011. There is about $180 million left and McGill sees buybacks continuing through 2013.

Janney sees FY13 EPS of $2.68, from $2.83 previously expected.

Shares of Starwood are flat in early trading.

For an analyst ratings summary and ratings history on Starwood Hotels & Resorts click here. For more ratings news on Starwood Hotels & Resorts click here.

Shares of Starwood Hotels & Resorts closed at $62.81 yesterday.




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