FBR Capital on Real Estate/Lodging: European RevPAR Growth Decelerated Slightly in February from January's Levels; FX Now a Tailwind
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Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
Rating Summary:
5 Buy, 11 Hold, 2 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
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FBR Capital on Real Estate/Lodging: European RevPAR Growth Decelerated Slightly in February from January's Levels; FX Now a Tailwind
FBR analyst says, "We have received the latest global RevPAR results from Smith Travel Research. RevPAR in Europe (in euros) in February was +7.9% year over year, versus +9.7% in January and +8.0% in December. The sequential deceleration from January to February is not unlike that in the U.S., where U.S. RevPAR was +7.9% in February, versus +8.7% in January and +7.4% in December. Unlike the past several months where foreign exchange (FX) has been a headwind to results in US dollars, FX was a tailwind in February, as RevPAR in Europe was +8.9% in U.S. dollars, versus +7.9% in euros. Despite difficult year-over-year comparisons, RevPAR in the Asia-Pacific region remained strong, at +16.7% (in U.S. dollars), an acceleration from the +14.9% year over year in January, and slightly lower than December’s +17.8%."
"Starwood, Hyatt, InterContinental, and Marriott have the greatest exposure to Europe and Asia. From Europe, Starwood Hotels (HOT – Market Perform, $57.81) generates approximately 20% of EBITDA, InterContinental (NYSE: IHG)(Outperform) 15%, and Hyatt (NYSE: H)(Market Perform) and Marriott (NYSE: MAR) 10%. Of these companies, Hyatt has the greatest exposure to Asia, as it generates approximately 15% of EBITDA from this region. Each of these other companies generates 5% to 10% of EBITDA from the Asia-Pacific region. Of these four companies, we favor InterContinental, based on its comparatively attractive valuation."
FBR analyst says, "We have received the latest global RevPAR results from Smith Travel Research. RevPAR in Europe (in euros) in February was +7.9% year over year, versus +9.7% in January and +8.0% in December. The sequential deceleration from January to February is not unlike that in the U.S., where U.S. RevPAR was +7.9% in February, versus +8.7% in January and +7.4% in December. Unlike the past several months where foreign exchange (FX) has been a headwind to results in US dollars, FX was a tailwind in February, as RevPAR in Europe was +8.9% in U.S. dollars, versus +7.9% in euros. Despite difficult year-over-year comparisons, RevPAR in the Asia-Pacific region remained strong, at +16.7% (in U.S. dollars), an acceleration from the +14.9% year over year in January, and slightly lower than December’s +17.8%."
"Starwood, Hyatt, InterContinental, and Marriott have the greatest exposure to Europe and Asia. From Europe, Starwood Hotels (HOT – Market Perform, $57.81) generates approximately 20% of EBITDA, InterContinental (NYSE: IHG)(Outperform) 15%, and Hyatt (NYSE: H)(Market Perform) and Marriott (NYSE: MAR) 10%. Of these companies, Hyatt has the greatest exposure to Asia, as it generates approximately 15% of EBITDA from this region. Each of these other companies generates 5% to 10% of EBITDA from the Asia-Pacific region. Of these four companies, we favor InterContinental, based on its comparatively attractive valuation."
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