Credit Suisse analysts initiated coverage on shares of Strategic Hotels and Resorts Inc BEE with a Neutral rating and $14 price target.
Ian Weissman outlined reasons for the initiation:
1) High quality portfolio, with a bent toward luxury, has helped BEE deliver sector leading fundamentals. BEE is largely considered one of the highest quality hotel owners in the sector. Its hotels have led the industry in a number of key metrics the last several years.
2) Over half of BEE's EBITDA is generated in California (among the strongest RevPAR state in the country), while ~26% of BEE’s EBITDA comes from the San Francisco metro area—one of the strongest hotel markets in the country.
3) Virtually no supply risk across BEE's core markets. Excluding New York City and to a lesser extend DC, BEE's core markets face little-to-no supply risk (for upper upscale and luxury branded hotels) over the next three years.
Shares of Strategic Hotels and Resorts recently traded at $12.73.
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