Nomura Securities Maintains a 'Buy' on Choice Hotels (CHH); Q3 Review
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Price: $104.44 -0.12%
Rating Summary:
2 Buy, 19 Hold, 5 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
Rating Summary:
2 Buy, 19 Hold, 5 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
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Nomura Securities maintains a 'Buy' on Choice Hotels (NYSE: CHH) price target of $34.00.
Nomura analyst, Harry Curtis, said, "3Q Operating EPS of $0.64. Potential upside to Street at $0.60 and NSI at $0.63. CHH reported stronger-than-consensus results driven by an 8.5% increase in franchising revenue and lower D&A. 5.4% RevPAR was in line with our expectation. The results were a bit noisy since reported EPS were $0.71 owing to a lower tax rate. On the 9:30 am call, there are two issues worthy of further discussion: 1) what will be the uses of CHH’s cash in 2012, and how much cash could be available for share repurchase? and 2) when will CHH’s new unit pipeline stabilize? As a franchisor, CHH has the highest ROIC in the lodging industry at over 35%, driving a premium multiple over the last 10 years. The key to multiple expansion from here, in our view, is a resumption of unit growth."
For more ratings news on Choice Hotels click here and for the rating history of Choice Hotels click here.
Shares of Choice Hotels closed at $34.46 yesterday.
Nomura analyst, Harry Curtis, said, "3Q Operating EPS of $0.64. Potential upside to Street at $0.60 and NSI at $0.63. CHH reported stronger-than-consensus results driven by an 8.5% increase in franchising revenue and lower D&A. 5.4% RevPAR was in line with our expectation. The results were a bit noisy since reported EPS were $0.71 owing to a lower tax rate. On the 9:30 am call, there are two issues worthy of further discussion: 1) what will be the uses of CHH’s cash in 2012, and how much cash could be available for share repurchase? and 2) when will CHH’s new unit pipeline stabilize? As a franchisor, CHH has the highest ROIC in the lodging industry at over 35%, driving a premium multiple over the last 10 years. The key to multiple expansion from here, in our view, is a resumption of unit growth."
For more ratings news on Choice Hotels click here and for the rating history of Choice Hotels click here.
Shares of Choice Hotels closed at $34.46 yesterday.
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