UPDATE: JP Morgan Downgrades Choice Hotels International to Underweight
JP Morgan has published a research report on Choice Hotels International (NYSE: CHH) and has downgraded the company from Neutral to Underweight.
In the report, JP Morgan writes, "We are lowering our rating on CHH to Underweight from Neutral. Our year-end 2012 price target goes to $31 from $34, implying 16% downside from current levels, and assumes CHH can trade at 10x 2012E EV/EBITDA by year end. Since CHH reported 3Q11 earnings in late October, its shares are up 7.4%, outperforming the sector and the S&P 500 by 680 bps and 740 bps, respectively. For the full year 2011, CHH has meaningfully outperformed the average of its lodging C-Corp peers by some 1400 bps. We believe investors have been ‘hiding out' in CHH given its defensive, largely domestic (and limited direct Europe/Asian exposure), sturdy franchise model, but believe this perceived safe characteristic has largely played out in its valuation."
JP Morgan has also lowered the price target from $34 to $31 on Choice Hotels International, which is currently trading down $0.53 from yesterday's $37.74 closing price.
© 2017 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.