Will This Ratings Upgrade Have A Positive Affect On Starwood Hotels and Resorts Worldwide (HOT) Stock Today?

NEW YORK (TheStreet) -- Starwood Hotels and Resorts Worldwide Inc. (HOT) was upgraded to "buy" from "hold" at MVL and Co. on Thursday morning.

The firm said it raised its rating on the hotel and leisure company based on its belief "that an improving economic landscape in the Eurozone will translate into increased asset sales and share repurchases, exceeding current muted expectations," Benzinga.com reports.

MLV raised its price target on the stock to $96 from $86.

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Shares of Starwood are down -0.69% to $83.58 at the beginning of trade on Thursday.

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 solid stock price performance, reasonable valuation levels, largely solid financial position with reasonable debt levels by most measures and notable return on equity. We feel these strengths outweigh the fact that the company has had sub par growth in net income."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • Compared to its closing price of one year ago, HOT's share price has jumped by 29.89%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, although almost any stock can fall in a broad market decline, HOT should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • The current debt-to-equity ratio, 0.48, is low and is below the industry average, implying that there has been successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.78 is somewhat weak and could be cause for future problems.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Hotels, Restaurants & Leisure industry and the overall market on the basis of return on equity, STARWOOD HOTELS&RESORTS WRLD has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 5.8%. Since the same quarter one year prior, revenues slightly dropped by 5.3%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • You can view the full analysis from the report here: HOT Ratings Report
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