Starwood Hotels Remains a Buy

We maintain our Buy rating for Starwood Hotels (HOT - Analyst Report). We consider the company's significant exposure to international markets and concentration in higher-end hotels to be positive attributes that should help Starwood to weather the economic downturn in the U.S. market.

Even in the weakening hotel operating environment, we believe that the recent pullback has been overdone, and we consider shares of Starwood Hotels to be attractive at the current level. Our price target of $35.50 per share reflects an enterprise value/EBITDA multiple of 8x our 2009 EBITDA estimate.

Starwood derives the majority of its revenue from its full-service, luxury/upscale brands, including Sheraton, Westin, St. Regis, The Luxury Collection, W, Four Points by Sheraton, and Le Meridien. The majority of the company-owned properties are operated under the Sheraton and Westin brands and located in major North American markets.

Read the full analyst report on HOT