Jefferies Lowers Price Target on Morgans Hotel Group (MHGC), Signs of Slow Growth

Jefferies is reaffirming its Hold rating on shares of Morgans Hotel Group (NASDAQ: MHGC), but is lowering its price target from $9 to $7.

The company released its Q2 results with EBITDA coming in under and revenue coming in above expectations. RevPAR was up 16.1 percent at system wide comparable hotels. Owned hotel RevPAR was up 13.5 percent with a strong 9.5 percent ADR growth rate and a 3.7 percent increase in occupancy.

The firm is lowering its 2011 and 2012 EPS estimates from $38.8 million and $57.9 million to $38.8 million and $57.9 million. Jefferies RevPAR estimates for the owned hotels are 8.9 percent in 2011 and 9.9 percent in 2012. They also cut their EPS estimates for 2011 and 2012 from ($1.61) and ($0.56) to ($1.93) and ($0.69).

For more ratings news on Morgans Hotel Group click here and for the rating history of Morgans Hotel Group click here.

Shares of Morgans Hotel Group closed at $6.87 yesterday.

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