Meanwhile, Morgan Stanley's economists raised their U.S. economic outlook and expects to see a 2.2 percent GDP growth in 2017 and 2018, up from a prior 2.0 percent growth outlook in both years. Perhaps more important, business fixed investment was raised from 2.3 percent in 2017 and 3.1 percent in 2018 to 4.5 percent this year and 3.7 percent next year.
As a result of these two tailwinds, the hotel chain's RevPAR is expected to grow 2.5 percent this year and 2.0 percent next year, Allen stated. This marks an improvement from prior estimates, which called for a RevPAR growth of just 2 percent this year and zero growth in 2018.Finally, the analyst's outlook for RevPAR growth, combined with La Quinta's underperfomance year to date, is reason enough to justify an Overweight rating and for investors to "take the risk" in owning shares.
Related Link: Hyatt CEO: We Are Looking Beyond Hotels In 2017 Priceline Slapped With A $2,000 Price Target __________ Image Credit: By Mr. Satterly - Own work, WTFPL, via Wikimedia Commons© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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