Wachovia Move Optimistic on RevPAR Outlook; Upgrades Choice Hotels (CHH) to Outperform

June 30, 2009 7:33 AM EDT

Wachovia upgrades Choice Hotels (NYSE: CHH) from Market Perform to Outperform. Valuation range of $29-31.

Wachovia analyst says, "Positive considerations: (1) High margin franchise model is more resilient -- 80% of revenues from royalties; (2) Select service price point is less impacted by loss of corporate group/transient business; (3) 70% of guests are leisure travelers and CHH could benefit if travel rebounds this summer because guests 'trade down'; (4) Brand acquisition opportunities more likely to arise in lower price points; and (5) Relative valuation is cheap vis-à-vis peers and CHH has materially underperformed."

To see more analyst ratings on CHH Click Here.

Choice Hotels International, Inc. is a hotel franchisor. As of December 31, 2008, it had 5,827 hotels open and 1,108 hotels under development, representing 472,526 rooms open and 89,105 rooms under development in 49 states, the District of Columbia and 30 countries and territories outside the United States.

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