UBS Reiterates a 'Neutral' on Choice Hotels (CHH); 2012 Outlook Looks Solid, But Comfort Revitalization
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Price: $104.57 --0%
Rating Summary:
2 Buy, 19 Hold, 5 Sell
Rating Trend:
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Today's Overall Ratings:
Up: 10 | Down: 8 | New: 7
Rating Summary:
2 Buy, 19 Hold, 5 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 10 | Down: 8 | New: 7
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UBS reiterates a 'Neutral' on Choice Hotels (NYSE: CHH) price target raised from $37 to $39.
UBS analyst says, "CHH issued FY’12 RevPAR guidance of +4-6% vs. Street +4.2% and UBS pre-release +4.0%, which implies management believes Q2-Q4 RevPAR run rate will be significantly below +8% issued for Q1’12. Recall, MAR management indicated on its Q4’11 call that it expects 2012 RevPAR growth to be back-end loaded. We note that Choice’s more conservative estimation for Q2-Q4 RevPAR could come from lower forward visibility vs. Marriott, given CHH has smaller group business mix. So, we believe there could be upside to 2012 RevPAR guidance."
"While the company expects to see some short-term uptick from raised brand standards via Comfort's “Redefined & Redesigned” program, mgmt expects that bulk of results will be visible over time, perhaps in a 3-5 year window. Recall, the company noted in late January that it could remove up to 10% of Comfort room count from the system for units that do not come up to standard."
UBS raises FY12 EPS estimate from $1.89 to $1.92 and FY13 from $1.90 to $2.07.
For an analyst ratings summary and ratings history on Choice Hotels click here. For more ratings news on Choice Hotels click here.
Shares of Choice Hotels closed at $36.88 yesterday.
UBS analyst says, "CHH issued FY’12 RevPAR guidance of +4-6% vs. Street +4.2% and UBS pre-release +4.0%, which implies management believes Q2-Q4 RevPAR run rate will be significantly below +8% issued for Q1’12. Recall, MAR management indicated on its Q4’11 call that it expects 2012 RevPAR growth to be back-end loaded. We note that Choice’s more conservative estimation for Q2-Q4 RevPAR could come from lower forward visibility vs. Marriott, given CHH has smaller group business mix. So, we believe there could be upside to 2012 RevPAR guidance."
"While the company expects to see some short-term uptick from raised brand standards via Comfort's “Redefined & Redesigned” program, mgmt expects that bulk of results will be visible over time, perhaps in a 3-5 year window. Recall, the company noted in late January that it could remove up to 10% of Comfort room count from the system for units that do not come up to standard."
UBS raises FY12 EPS estimate from $1.89 to $1.92 and FY13 from $1.90 to $2.07.
For an analyst ratings summary and ratings history on Choice Hotels click here. For more ratings news on Choice Hotels click here.
Shares of Choice Hotels closed at $36.88 yesterday.
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