Why Starwood Hotels & Resorts Worldwide (HOT) Was Upgraded

Story updated at 9:40 a.m. to reflect market activity.

NEW YORK (TheStreet) -- Starwood Hotels & Resorts Worldwide (HOT) was upgraded to "buy" from "neutral" by UBS Friday.

Starwood Hotels & Resorts Worldwide gained 1.7% to $76.65.

The firm set a price target of $85 for the hotel operator, up from its previous $75. Analysts Robin M. Farley and Arpine Kocharyan said they have a favorable outlook for Starwood following Thursday's pullback.

The analysts wrote their favorable outlook is due to "1) China RevPAR improving, RevPAR at +3.5% in Q4 from +1.6% in Q3, sequential improvement after a couple of qtrs with missed or lowered China guidance, and mgmt expects China RevPAR up more than Q4 growth of +3.5% 2) continued strength in N. Am (with Q4 RevPAR +6.1%, higher end of +5-6% guidance) and 3) ample flexibility on balance sheet for buybacks even if asset sales are more weighted toward later in the cycle."

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Separately, TheStreet Ratings team rates STARWOOD HOTELS&RESORTS WRLD as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:

"We rate STARWOOD HOTELS&RESORTS WRLD (HOT) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance, reasonable valuation levels, growth in earnings per share and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company has had sub par growth in net income."

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