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Zacks Analyst Blog Highlights: Marriott, Starwood, Intercontinental Hotels Group, Wyndham Worldwide and Gafisa S.A.

June 01, 2009 | Comments: 0
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MAR | HOT | IHG | WYN | GFA

For Immediate Release

Chicago, IL – June 1, 2009 - Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Marriott (MAR - Analyst Report), Starwood (HOT - Analyst Report), Intercontinental Hotels Group (IHG - Snapshot Report), Wyndham Worldwide (WYN - Snapshot Report) and Gafisa S.A. (GFA - Analyst Report).

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Here are highlights from Friday’s Analyst Blog:

Hotel Stocks Due for Correction

Shares of Marriott (MAR - Analyst Report) have rallied approximately 85% from the lows reached in early March. Shares of Starwood (HOT - Analyst Report) have climbed even higher, rallying roughly 150% since early March. Shares of other companies in the industry, including Intercontinental Hotels Group (IHG - Snapshot Report) and Wyndham Worldwide (WYN - Snapshot Report), have made similar moves. Given the current state of industry fundamentals, and our expectation that operating metrics will continue to deteriorate, we consider the magnitude of these moves to be excessive.

Revenue per available room, or RevPAR, is a key operating metric in the lodging industry. This metric is derived by multiplying the occupancy percentage of a hotel over a given period by the average daily room rate, or ADR, over that same period. Changes in either occupancy or ADR will impact RevPAR, but with different implications for bottom-line profitability.

Gafisa a Strong Brazil Play

We are reiterating our Buy recommendation on Gafisa S.A. (GFA - Analyst Report). We have been encouraged by the stimulus package and the new value-added tax relief recently announced by the Brazilian government.

First quarter 2009 results were positive considering the international crisis, which has affected Brazil's construction sector. The new Government Housing Program and the R$600 million debenture from Caixa Econômica will help Tenda to expand its business plan for the development of projects in the lower income sector.

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