FBR Capital First-Quarter 2011 Lodging Earnings Preview: Revenge of the Holiday Inns and Sheratons
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Price: $354.83 -0.5%
Rating Summary:
19 Buy, 18 Hold, 2 Sell
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Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
Rating Summary:
19 Buy, 18 Hold, 2 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
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FBR Capital First-Quarter 2011 Lodging Earnings Preview: Revenge of the
Holiday Inns and Sheratons
FBR analyst says, "Marriott (NYSE: MAR) and LaSalle Hotel (NYSE: LHO) kick off 1Q earnings season for the lodging companies when they report today after the close. We expect most companies to report earnings in line with expectations (partly from consensus coming down over the past month), with CHH and IHG best positioned to beat consensus and/or guidance. Given MAR's recent announcement that it expects 1Q North American RevPAR to be up 5%–6%, or below original 6%–8% guidance, and SHO's (57% of revenues from Marriott hotels) announcement that its 1Q RevPAR was +5.4%, we believe 1Q softness is priced in. Looking ahead, we believe MAR will guide to 2Q North American RevPAR of +5%–7%, although 6%–8% is equally possible as the company’s 2Q will benefit by having the last week of March (easy Easter comp) in its results. Guidance of +5%–7% would be approximately 100 bps lower than most are anticipating, but after the 1Q RevPAR miss, we expect MAR to be extra conservative with 2Q guidance. We anticipate that MAR will keep full-year 2011 North American RevPAR guidance at +6%–8%. We also expect the company to address its 1Q comparative softness, versus other upperupscale hotels, and comment that forward bookings rebounded nicely in March and early April after a weak February."
"Adjusting estimates and price targets. Reflecting the recent equity offering, we are reducing our price target for Chesapeake Lodging Trust (Nasdaq: CHSP) to $23 from $24 and our earnings estimates. We are also changing our estimates for Diamondrock Hospitality (NYSE: DRH), FelCor Lodging Trust (NYSE: FCH), Host (NYSE: HST), and MAR."
Holiday Inns and Sheratons
FBR analyst says, "Marriott (NYSE: MAR) and LaSalle Hotel (NYSE: LHO) kick off 1Q earnings season for the lodging companies when they report today after the close. We expect most companies to report earnings in line with expectations (partly from consensus coming down over the past month), with CHH and IHG best positioned to beat consensus and/or guidance. Given MAR's recent announcement that it expects 1Q North American RevPAR to be up 5%–6%, or below original 6%–8% guidance, and SHO's (57% of revenues from Marriott hotels) announcement that its 1Q RevPAR was +5.4%, we believe 1Q softness is priced in. Looking ahead, we believe MAR will guide to 2Q North American RevPAR of +5%–7%, although 6%–8% is equally possible as the company’s 2Q will benefit by having the last week of March (easy Easter comp) in its results. Guidance of +5%–7% would be approximately 100 bps lower than most are anticipating, but after the 1Q RevPAR miss, we expect MAR to be extra conservative with 2Q guidance. We anticipate that MAR will keep full-year 2011 North American RevPAR guidance at +6%–8%. We also expect the company to address its 1Q comparative softness, versus other upperupscale hotels, and comment that forward bookings rebounded nicely in March and early April after a weak February."
"Adjusting estimates and price targets. Reflecting the recent equity offering, we are reducing our price target for Chesapeake Lodging Trust (Nasdaq: CHSP) to $23 from $24 and our earnings estimates. We are also changing our estimates for Diamondrock Hospitality (NYSE: DRH), FelCor Lodging Trust (NYSE: FCH), Host (NYSE: HST), and MAR."
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