July 1, 2010 11:16 AM EDTLate last night, Hudson Securities initiated coverage on a number of stocks in the Lodging sector:
- Marriott International (NYSE: MAR) with a Buy rating and $39 price target. Firm says Marriott "will benefit right away from rising RevPAR levels as 85% of current fee-stream comes from base management and franchise fees which are directly tied to a hotel’s top-line trends." Hudson also notes that it is modeling for incentive fees to double between 2009-2012.
- Starwood Hotels (NYSE: HOT) with a Buy rating and $61 price target. Sees fundamentals and earnings recovery faster than expected as the firm expects the "restart of 'asset light' strategy where HOT sells owned hotels and to shift its business toward more fee-based management and franchising."
- Wyndham Worldwide (NYSE: WYN) with a Buy rating and $33 price target. Firm cites, "At 5.4x 2012 EBITDA, WYN is most compelling value in the sector... WYN is a free cash flow machine that should produce FCF of $500-$600 million per year for the foreseeable future."
- Host Hotels (NYSE: HST) with a Hold rating and $13 price target. Calls the stock a "Pure-play on high-end owned hotel real estate..."
- Hyatt Hotels (NYSE: H) with a Hold rating and $43 price target.
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