UPDATE: Nomura Upgrades Hyatt Hotels on Raised Estimates from Positive Outlook

In a report published Monday, Nomura analyst Harry C. Curtis upgraded the rating on

from Neutral to Buy, and raised the price target from $47.00 to $59.00. In the report, Nomura noted, “Hyatt's stock is up 28% in 2013, compared with the S&P 500 gaming lodging and leisure index's performance of +20%. We believe it will increase to $59 over the next 12 months, and to $64 when 2015 estimates are used, offering upside of another 26%, and 37%. We are lifting our 2014/2015 RevPAR estimates modestly to 6% globally from 5.6% to reflect our view that international demand will improve versus 2013. Our EBITDA expectations are essentially in line with the street, although if we are correct about 6% RevPAR, then our margin growth assumption of 120bp for 2014 could have upside. Our Investment Themes are: High operating leverage to a lodging recovery; Recent upgrade of H owned portfolio; Commitment to a strong balance sheet; Over $3/Share of free cash flow, increasing nearly 20%/year. Our $59 target indicates one of the highest potential returns in lodging.” Hyatt Hotels Corporation closed on Friday at $46.83.