Jefferies Cuts Price Targets on Gaylord Entertainment (GET) 35% as Management Reduces Guidance

Jefferies is reaffirming its Hold rating on shares of Gaylord Entertainment (NYSE: GET), but is lowering its price target from $27 to $20.

The company released its third quarter results relatively weaker than expected with $225.2 million in revenue and EBITDA of $48.8 million. The firm notes that GET's Palms and National segments underperformed while its Texan segment fell inline.

Hotel RevPAR rose 2.1 percent as occupancy fell 90 bps and ADR increased 3.2 percent. Due to weaker out of room spend particularly at its National and Palms, total RevPAR fell 7 percent.

Management lowered its FY11 guidance to below previous expectations. The company narrowed its FY11 adjusted EBITDA estimate from $215-$230 million to $215-$225 million and its total RevPAR estimate from 4-6 percent to 0.5-2.5 percent. The new guidance reflects the weakness being experienced at the Palms and National.

For 2012, Gaylord Entertainment forecasts adjusted EBITDA of $228-$243 million on RevPAR growth of 3-6 percent.

Jefferies cut its FY11 and FY12 adjusted EBITDA estimates from $222.3 million and $242.6 million to $217.5 million and $233.7 million. The firm's new estimates are based on total RevPAR growth of 2.1 percent.

For more ratings news on Gaylord Entertainment click here and for the rating history of Gaylord Entertainment click here.

Shares of Gaylord Entertainment closed at $20.44 yesterday.

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