Jefferies Raises Target 20%+ on Choice Hotels (CHH) Following Q3 Numbers; Likes Growth Outlook
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Price: $40.74 -1.04%
Rating Summary:
1 Buy, 11 Hold, 3 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 12 | Down: 19 | New: 22
Rating Summary:
1 Buy, 11 Hold, 3 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 12 | Down: 19 | New: 22
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Jefferies boosted its price target on Choice Hotels (NYSE: CHH) about 21 percent from $33 to a new target of $40. The firm maintains a Buy rating on the shares following third-quarter results.
Choice reported third-quarter earnings of 71 cents per share, beating both Jefferies and the consensus estimates by 12 cents. Adjusting for a one-time tax benefit, and Choice earnings were 64 cents per share, still above 59 cents expected. Adjusted EBITDA came in at $64.9 million, about 7.8 percent better than the $60.2 million consensus.
RevPAR increased 2.5 internationally, 5.4 percent at domestic hotels, occupancy up 2 points, and ADR up about 1.9 percent, Jefferies notes.
Commenting, Jefferies said, "We suggest Choice is performing well in the current operating environment and note the first share repurchases in several quarters as an important indicator. Choice’s customers are primarily leisure (2/3) but management indicated that upside is being driven by business travelers who are still traveling but are being restricted to more “value” properties. We believe this helped to drive some of the RevPAR upside in the quarter and will continue in the near term especially if the markets continue their volatility." The firm also believes buybacks and dividend increases will continue for the foreseeable future.
On the report, Jefferies boosted some numbers, FY11 EPS from $1.74 to $1.88 and adjusted EBITDA from $179.2 millon to $185.2 million, FY12 EPS from $1.91 to $2.00, FY11 adjusted EBITDA from $193.1 million to $201.7 million.
Click here for more analyst color on Choice, or here for a ratings history.
Choice is over 5 percent better Friday.
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Choice reported third-quarter earnings of 71 cents per share, beating both Jefferies and the consensus estimates by 12 cents. Adjusting for a one-time tax benefit, and Choice earnings were 64 cents per share, still above 59 cents expected. Adjusted EBITDA came in at $64.9 million, about 7.8 percent better than the $60.2 million consensus.
RevPAR increased 2.5 internationally, 5.4 percent at domestic hotels, occupancy up 2 points, and ADR up about 1.9 percent, Jefferies notes.
Commenting, Jefferies said, "We suggest Choice is performing well in the current operating environment and note the first share repurchases in several quarters as an important indicator. Choice’s customers are primarily leisure (2/3) but management indicated that upside is being driven by business travelers who are still traveling but are being restricted to more “value” properties. We believe this helped to drive some of the RevPAR upside in the quarter and will continue in the near term especially if the markets continue their volatility." The firm also believes buybacks and dividend increases will continue for the foreseeable future.
On the report, Jefferies boosted some numbers, FY11 EPS from $1.74 to $1.88 and adjusted EBITDA from $179.2 millon to $185.2 million, FY12 EPS from $1.91 to $2.00, FY11 adjusted EBITDA from $193.1 million to $201.7 million.
Click here for more analyst color on Choice, or here for a ratings history.
Choice is over 5 percent better Friday.
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