Deutsche Bank Downgrades China Lodging Group (HTHT) to Hold; Prefer 7 Days Group (SVN)

Deutsche Bank downgraded China Lodging Group (NASDAQ: HTHT) from Buy to Hold with a price target lowered from $16.90 to $14.56.

Deutsche analyst says, "HTHT reported 4Q11 revenues in line with consensus driven by normalized same-hotel RevPar growth and against easy YoY comps. However, the hotel income margin declined 500bps to 21.2% due to pressure from inflation-pegged cost items. The EBIT margin declined 190bps YoY due to a surge in pre-opening costs. Management suggested the constraints to margin expansion were due to a slower ramp-up in same-hotel growth in lower-tier markets. We err on the side of caution on margins for FY12E. 7 Days (NYSE: SVN) is our top sector pick."

For an analyst ratings summary and ratings history on China Lodging Group click here. For more ratings news on China Lodging Group click here.

Shares of China Lodging Group closed at $15.25 yesterday.

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