Barclays On Starwood: There's 'Bias Towards Action'

In a report published Thursday, Barclays analysts maintained an Overweight rating on

, while raising the price target from $90 to $93. Starwood is benefitting from the organic global growth in travel and the favorable demand/supply trends in the US. The company has also continued to focus on improving its operational performance through proactive decisions, such as the exploration of strategic alternatives. "We can envision a variety of potential strategic alternatives for HOT, including a sale of the company, a large acquisition or a financial restructuring," the analysts stated. The company reported its 1Q15 adjusted EPS at $0.65, ahead of estimates, largely due to higher owned EBITDA, higher vacation ownership profit and lower SG&A costs. Referring to Starwood's plans to explore various strategic alternatives, the report mentioned that "even in the absence of a transformative deal, many of HOT's recent steps (timeshare spin, SG&A reductions, reengagement with hotel owners, reinvestment in brands) are much needed initiatives that should create shareholder value over the medium to long term." Starwood also announced plans to reinvest in the Sheraton brand besides increasing the marketing for its Luxury collection, W Hotels and Aloft brands. The EPS estimates for 2015 and 2016 have been raised from $2.91 to $3.01 and from $3.30 to $3.49, respectively.