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NEW YORK — Solid cost control efforts and a strong business mix will work in Starwood Hotels & Resorts Worldwide Inc.'s favor as the lodging sector starts to emerge from the pressures of the recession, a JPMorgan analyst said Friday as he raised the hotel and leisure company's price target.
Analyst Joseph Greff said in a client note that Starwood has managed its expenses well and done a better-than-expected job at cutting its selling, general and administrative and property-level expenses.
The White Plains, N.Y.-based company also stands to benefit from its combination of hotel ownership and management with franchise operations. A mix of luxury properties in key markets like New York, Hawaii and Europe and reduced expenses provides Starwood with "the highest recovery in lodging in the future and certainly the easiest comparisons in 2010," according to Greff.
The analyst increased Starwood's price target to $39 from $29 and reiterated its "Overweight" rating.
"We are increasingly comfortable with Starwood's positioning in an improving global macro economy and lodging recovery cycle," he explained.
The company's stock fell 34 cents to $33.84 in morning trading.
