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Strategies & Market Trends : Three Amigos Stock Thread -- Ignore unavailable to you. Want to Upgrade?

To: Ken W who wrote (19575)	4/13/2000 3:49:00 PM
From: Sergio H	Read Replies (1) \| Respond to of 29382

Ola Ken. Might be Greenie, but I think it more likely Bear Stearns tepid endorsement this morning: <Industry Overview Jason Ader ? Lodging Sector Rotation Implications Since the NASDAQ peaked on March 10, sector rotation out of tech stocks an into old economy stocks has benefited the lodging sector. Since the NASDAQ peak, the Bear Stearns Large-Cap Lodging Index is up 25%, Starwood is up 40%, Hilton is up 25%, and Marriott is up 23%. As we move into what we believe will be a strong earnings season, we believe the sector can maintain this momentum. Industry fundamentals are positive: the economy remains robust, 1Q RevPAR trends were positive, most big city hotel markets are still very strong, supply remains in check, and the potential of an oil price induced slowdown is easing. Right now, Starwood and Marriott are the best picks in the group. In our view, these two names share a clean story, rock-solid operating prospects, attractive valuations, and liquidity. While we still like Four Seasons and Hilton over the longer-term, we think Starwood and Marriott will perform better in the near term. Marriott International (MAR - $33 3 /16 ) Buy Price Target: $41-$43 Reiterate Buy Market Cap: $8.1 Billion Index: NYSE Composite, Russell 1000 MAR trades at 9.3x and 8.3x our 2000 and 2001 EBITDA estimates of $1.04 billion and $1.18 billion, respectively. We ran a discounted cash flow analysis given MAR? s weighted average cost of capital (13%) and its estimated cash flow generating abilities over the next five years. This analysis supports an asset value of $43, corresponding to an EBITDA multiple of 10.5x on 2001 EBITDA estimates. Adopting a slightly more conservative approach, we consider the DCF analysis to be the high-end of our target asset value range. Therefore, at 10.0x-10.5x our target asset value range is $41-$43, significantly above currently levels. We reiterate our Buy. Bear Stearns: 12/2000E $1.87; Q2 $0.48 12/2001E $2.14 Consensus: 12/2000E $1.87; Q2 $0.47 12/2001E $2.16 Consensus Rating: 1.9 (last updated 4/13) Starwood Hotels & Resorts (HOT - $29 ¬) Buy Target: $23-$36 Reiterate Buy Market Cap: $5.5 Billion Index: NYSE Composite, Russell 1000 HOT trades at 6.8x and 6.1x our 2000 and 2001 EBITDA estimates of $1.54 billion and $1.65 billion, respectively. We ran a discounted cash flow analysis given HOT? s weighted average cost of capital (12.5%) and its estimated cash flow generating abilities over the next five years. This analysis yielded an asset value of $32, corresponding to an EBITDA multiple of 6.5x our 2001 EBITDA estimate. We have considered the DCF analysis to be the lower end of our target asset value range. Therefore, at 6.5x-7.0x our target asset value range is $33-$36, about 15%-20% upside from current levels. We reiterate our Buy. Bear Stearns: 12/2000E $1.86; Q1 $0.25 12/2001E $2.20 Consensus: 12/2000E $1.86; Q1 $0.25 12/2001E $2.17 Consensus Rating: 1.7 (last updated 4/11)> Sergio