LaSalle Hotel Properties
by Zacks Equity ResearchJune 19, 2012 | Comments : 0 Recommended this article: (0)
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The company has been a Zacks #1 Rank (Strong Buy) since June 7, 2012.
Strong First Quarter
On April 18, 2012, LaSalle reported growth in first quarter 2012 adjusted FFO/share of 61.5% to 21 cents, exceeding the Zacks Consensus Estimate by 4 cents.
Adjusted EBITDA surged by 36.9% on a year-over-year basis to $34.0 million in the first quarter 2012, while RevPAR (revenue per available room) increased 6.2% to $127.06 driven by a 3.9% rise in the average daily rate to $176.78 and a 2.3% rise in occupancy to 71.9%.
With strong quarterly results and accretive acquisitions, LaSalle increased its dividend for the second quarter 2012 by a phenomenal 82% to 20 cents per share, or 80 cents on an annualized basis.
Fiscal Outlook Raised
LaSalle raised its fiscal 2012 adjusted FFO guidance to between $2.09 and $2.21 per share from the earlier range of $1.92 $2.05.. Hotel EBITDA margins are presently expected in the range of 32% - 33% compared to earlier projections of 31.5% - 32.8%. However RevPAR growth projections for fiscal 2012 are maintained in the range of 5.0%- 7.0%.
Surge in Earnings Estimate Revisions
Over the past 60 days, the Zacks Consensus Estimate for fiscal 2012 increased 4.8% to $2.19, while the outlook for 2013 advanced 5.9% to $2.52. The 2012 earnings estimate, at an implied growth rate of 39.5%, is at the higher end of the company guidance and should be an attractive investment proposition for aggressive growth investors.
LaSalles valuation looks reasonable on a price-to-earnings (P/E) and price-to-book (P/B) basis. Shares of LaSalle are currently trading at a forward P/E of 12.76x versus 11.71x for the peer group. On a P/B basis, LaSalle is currently trading at 1.34x versus 1.20x for the peer group. However, shares look pretty impressive with a ROE of 2.8%, which is better than the peer group average.
Chart Resonates Growth Potential
Since December 21, 2011, LaSalle shares have consistently fared relatively better than the simple moving average for 200 days or SMA (200). The stock has also more or less mirrored the S&P performance, beating it more often than not since year-end 2011. The year-to-date return for the stock is noteworthy at 15.44% compared to a S&P tally of 6.78%.
LaSalle Hotel Properties owns luxury and upper-upscale hotels in high barriers-to-entry markets throughout the U.S. The company specifically focuses on owning, redeveloping and repositioning upscale full-service hotels in urban, resort and convention markets. LaSalle currently owns 10,200 guest rooms in 13 markets in 9 states in the U.S. and the District of Columbia. The company presently has a market cap of $2.39 billion.
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