Nomura Securities on Lodging Sector: Improved Ecomonic Outlook Supports Higher RevPAR and Estimates
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Nomura Securities on Lodging Sector: Improved Ecomonic Outlook Supports Higher RevPAR and Estimates
Analyst, Harry Curtis, said, "4Q11 RevPAR should be in a range of 6%-8% for most lodging operators under our coverage and this trend has continued into 2012. We believe this higher range will persist, so we are revising our RevPAR outlook to ~ 6.5%, up from a range of 5% 5.5%. We are also factoring in modest multiple expansion to a range of 11x-12x, up from 10x-11x, yet below 2004-07 period of 12x-13x. We expect more upside despite recent outperformance. In our view, if our RevPAR growth estimate is reasonable for the next 12 months, there is ~15% upside potential remaining in the group with the exception of MAR, our favorite lodging stock, which our target price suggests has upside of 24% remaining this year.
Choice Hotels (NYSE: CHH): 2012E EBITDA from 204 to 207; 2013E from 218 to 226; PT from $36 to $41
Hyatt (NYSE: H): 2012E EBITDA from 637 to 671; 2013E from 712 to 753; PT from $33 to $43
Starwood (NYSE: HOT): 2012E EBITDA from 1,098 to 1,110; 2013E from 1,192 to 1,251; PT from $48 to $60
Host (NYSE: HST): 2012E EBITDA from 1,114 to 1,172; 2013E from 1,283 to 1,382; PT from $12 to $17
Marriott (NYSE: MAR): 2012E EBITDA from 1,200 to 1,195; 2013E from 1,435 to 1,332; PT from $38 to $43
Gaylord Entertainment (NYSE: GET): 2012E EBITDA from 228 to 241; 2013E from 232 to 241; PT from $25 to $31
Wyndham Worldwide (NYSE: WYN): 2012E EBITDA from 1,041 to 1,044; 2013E from 1,119 to 1,125; PT from $38 to $46
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Analyst, Harry Curtis, said, "4Q11 RevPAR should be in a range of 6%-8% for most lodging operators under our coverage and this trend has continued into 2012. We believe this higher range will persist, so we are revising our RevPAR outlook to ~ 6.5%, up from a range of 5% 5.5%. We are also factoring in modest multiple expansion to a range of 11x-12x, up from 10x-11x, yet below 2004-07 period of 12x-13x. We expect more upside despite recent outperformance. In our view, if our RevPAR growth estimate is reasonable for the next 12 months, there is ~15% upside potential remaining in the group with the exception of MAR, our favorite lodging stock, which our target price suggests has upside of 24% remaining this year.
Choice Hotels (NYSE: CHH): 2012E EBITDA from 204 to 207; 2013E from 218 to 226; PT from $36 to $41
Hyatt (NYSE: H): 2012E EBITDA from 637 to 671; 2013E from 712 to 753; PT from $33 to $43
Starwood (NYSE: HOT): 2012E EBITDA from 1,098 to 1,110; 2013E from 1,192 to 1,251; PT from $48 to $60
Host (NYSE: HST): 2012E EBITDA from 1,114 to 1,172; 2013E from 1,283 to 1,382; PT from $12 to $17
Marriott (NYSE: MAR): 2012E EBITDA from 1,200 to 1,195; 2013E from 1,435 to 1,332; PT from $38 to $43
Gaylord Entertainment (NYSE: GET): 2012E EBITDA from 228 to 241; 2013E from 232 to 241; PT from $25 to $31
Wyndham Worldwide (NYSE: WYN): 2012E EBITDA from 1,041 to 1,044; 2013E from 1,119 to 1,125; PT from $38 to $46
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