MLV & Co Sees Sentiment Beginning to Shift for Starwood Hotels & Resorts Worldwide

In a report published Wednesday, MLV & Co analyst Ryan Meliker reiterated a Buy rating and $91.00 price target on Starwood Hotels & Resorts Worldwide (NYSE: HOT).In the report, MLV & Co noted, "HOT reported strong 4Q results, exceeding guidance and consensus expectations on both EBITDA and EPS. Additionally, the company surprised by ramping up asset sales, the announcement of the timeshare business spin-off and an incremental $609M in share repurchases. Prior to earnings, we believe the Street had somewhat lost faith in management's ability to act upon the return of capital story, at least to the Street's expectations, which had weighed on the stock price. However, with this print, management may have reignited investor faith in the investor-friendly return-of-capital story that will convert HOT into an asset-light company. As such, we believe extremely negative sentiment toward the name may be turning positive. The sentiment shift should be aided by what we view as extremely conservative initial 2015 guidance that was largely overlooked by the Street and should be setting HOT up for a beat and raise story that persists throughout 2015. As such, we see material upside to shares even after today's 6.6% gain. We reiterate our BUY-rating and $91 YE 2015 PT."Starwood Hotels & Resorts Worldwide closed on Tuesday at $75.93.