S&P Analyst Research Notes
S&P MAINTAINS STRONG SELL OPINION OF SHARES OF STARWOOD HOTELS & RESORTS
Thursday 10/22/2009 10:51 AM ET - Standard & Poor's Research Notes
We calculate Q3 EPS of a $0.02 loss vs. $0.62, below our $0.10 est. The shortfall was primarily on a loss on a terminated hotel management contract. We find it illogical for HOT to exclude the impact of a canceled management contract, as HOT is in the business of managing hotels. We lower our '09 EPS est $0.05 to $0.25 for Q3 shortfall, offset by elimination of losses in Q4 from sold hotels. For '10, on adoption of FAS 166 regarding off-balance sheet items, we raise our est by $0.05 to $0.55. On EV/EBITDA multiple of 10.0X, vs. prior 9.5X, we hike our target price $2 to $16.