Host Hotels & Resorts (HST) Stock Gains on Acquisition, Stock Buyback, Analyst Upgrade

NEW YORK (TheStreet) -- Host Hotels & Resorts (HST) shares are up 1.55% to $20.01 in trading on Friday following the acquisition of a $400 million luxury hotel in Arizona and the announcement that it bought back 5.55 million common shares earlier this week.

Additionally, analysts at Stifel to upgrade the company's stock to a "buy" rating from "hold" with a $25 price target today, saying that the company's current value is too cheap to not invest in.

The Bethesda, MD-based real estate investment trust purchased the 643 room luxury hotel Phoenician in downtown Scottsdale, AZ on Tuesday and announced that it was purchasing about $117 million worth of its own shares.

"I am very excited to announce the progress we have made on a number of fronts. I am proud of our team's accomplishments to create value for stockholders through a major accretive acquisition at a significant discount to replacement cost, asset sales that increase the overall quality of our portfolio, stock repurchases and continuing progress on our redevelopment projects," said CEO W. Edward Walter.

TheStreet Ratings team rates HOST HOTELS & RESORTS INC as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:

"We rate HOST HOTELS & RESORTS INC (HST) a BUY. This is driven by several positive factors, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, reasonable valuation levels, good cash flow from operations and notable return on equity. We feel its 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:

  • Despite its growing revenue, the company underperformed as compared with the industry average of 8.5%. Since the same quarter one year prior, revenues slightly increased by 1.0%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • Net operating cash flow has slightly increased to $173.00 million or 1.16% when compared to the same quarter last year. In addition, HOST HOTELS & RESORTS INC has also modestly surpassed the industry average cash flow growth rate of 0.76%.
  • 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. When compared to other companies in the Real Estate Investment Trusts (REITs) industry and the overall market, HOST HOTELS & RESORTS INC's return on equity is below that of both the industry average and the S&P 500.
  • HOST HOTELS & RESORTS INC's earnings per share declined by 45.8% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, HOST HOTELS & RESORTS INC increased its bottom line by earning $0.97 versus $0.27 in the prior year. For the next year, the market is expecting a contraction of 33.0% in earnings ($0.65 versus $0.97).
  • You can view the full analysis from the report here: HST Ratings Report

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