Will This Upgrade Help Starwood Hotels & Resorts Worldwide (HOT) Stock Today?

Story updated at 9:45 p.m. to reflect market activity.

NEW YORK (TheStreet) -- Starwood Hotels & Resorts Worldwide (HOT) was upgraded to “equal weight” from “overweight” by Barclays (BCS) Friday.

Shares of STarwood gaing 09.% to $82.87 in morning trading.

The analyst set a price target of $89 for the company. Starwood shares should appreciate amidst company share repurchases and asset sales according to Barclays analysts.

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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, increase in net income, 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 shows weak operating cash flow."

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

  • The stock has risen over the past year as investors have generally rewarded the company for its earnings growth and other positive factors like the ones we have cited in this report. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Hotels, Restaurants & Leisure industry average. The net income increased by 11.7% when compared to the same quarter one year prior, going from $137.00 million to $153.00 million.
  • The current debt-to-equity ratio, 0.55, is low and is below the industry average, implying that there has been successful management of debt levels. Despite the fact that HOT's debt-to-equity ratio is low, the quick ratio, which is currently 0.69, displays a potential problem in covering short-term cash needs.
  • 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.
  • You can view the full analysis from the report here: HOT Ratings Report

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Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

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