Deutsche Raises Price Target on Choice Hotels (CHH) Due to New Estimates

Deutsche Bank is reaffirming its Hold rating on shares of Choice Hotels (NYSE: CHH) following the release of its Q4 results and better than expected 2012 guidance. The firm also is lifting its price target from $32 to $34.

Due to lower than expected SG&A expenses, the firm has raised its Q1, FY12 and FY13 EPS estimates from $0.28, $1.98 and $2.14 to $0.32, $2.05 and $2.21. Deutsche also lifted its adjusted EBITDA estimates from $29.5 million, $193.0 million and $206.7 million to $33.5 million, $204.3 million and $213.8 million.

An analyst at Deutsche comments, "commentary on the call suggests that CHH's contract sales have improved in early 2012, which should help to offset units lost as CHH refines the Comfort brand. We like CHH's simple business model and clean balance sheet, yet we find valuation fair and reflective of limited near term growth prospects."

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 $35.60 yesterday.

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