Despite the ongoing challenges brought about by the COVID-19 pandemic, some companies have managed to remain resilient and even achieve significant growth. One such company is Choice Hotels International (NYSE: CHH), which recently reported a strong performance for the first quarter of 2023.
In its quarterly earnings report released on May 9th, Choice Hotels International announced an EPS (earnings per share) of $1.12 for Q1, surpassing analysts’ estimates by $0.04. The company’s revenue for the quarter was also higher than expected at $333.80 million compared to the consensus estimate of $320.43 million – an increase of 29.5% from the same period last year.
Choice Hotels International’s return on equity (ROE) during Q1 was an impressive 129.67%, while its net margin was 21.50%. This strong financial performance highlights not only the company’s resilience in the face of adversity but also its ability to adapt and respond to changing market conditions.
In related news, insider trading has been taking place within the company, with Director William L. Jews selling over two thousand shares on March 10th at an average price of $119.46 and SVP Scott E. Oaksmith disposing of nearly one and a half thousand shares on March 6th at an average price of $126.05.
Despite this insider activity, however, investors remain bullish on Choice Hotels International’s future prospects, with CHH stock opening at $117.71 on Friday morning amidst a generally optimistic outlook from analysts and market commentators.
The firm’s current market capitalization stands at approximately $6 billion, with a PE ratio of 20.29 and a beta of 1.27 demonstrating steady but not excessive risk levels relative to comparable companies in the industry.
Furthermore, despite being subject to ongoing pressures related to debt-to-equity ratios (standing at a somewhat elevated 29.25), Choice Hotels International’s balance sheet remains stable, with both quick and current ratios of 0.92.
Overall, while some uncertainty remains concerning the ongoing COVID-19 pandemic and its impact on the travel and hospitality sectors specifically, Choice Hotels International’s recent performance and growth prospects suggest that it is well-placed to continue delivering value to shareholders well into the future.
Mixed Opinions on Choice Hotels International’s Future
Recently, Choice Hotels International Inc. (NYSE:CHH) has been in the spotlight as equities researchers at Zacks Research raised their Q1 2024 earnings per share estimates for the company in a note issued to investors on May 23rd. H. Ray, a Zacks Research analyst, believes that the hotel chain will earn $1.17 per share for the quarter, an improvement from their prior estimate of $0.93.
Zacks Research also issued estimates for Choice Hotels International’s FY2024 earnings at $6.49 EPS, with current full-year earnings estimated to be $6.03 per share. However, several other equities research analysts have expressed differing opinions regarding the state of this hotel conglomerate.
StockNews.com began coverage on shares of Choice Hotels International in a research note on May 18th where they gave a “hold” rating on the stock. Robert W. Baird lifted their target price on Choice Hotels International from $134.00 to $135.00 in a research note on May 12th.
Truist Financial increased their price target on Choice Hotels International from $120.00 to $132.00 but only gave it a “hold” rating in their report released March 24th and TheStreet degraded shares of Choice Hotels International from a “b” rating to a “c+” rating on May 9th.
Lastly, Morgan Stanley upped its price objective on shares of Choice Hotels International from $130.00 to $134.00 in its report released May 12th but four investment analysts have gone against this move by giving the hotel chain unfavourable ratings since then.
According to Bloomberg, in general, there seems to be uncertainty over whether or not this is an ideal investment opportunity given that four investment analysts have rated the stock with a sell rating while four others remain neutral with “hold” ratings and only one analyst has given a positive rating on the stock.
Choice Hotels International is also set to pay out a quarterly dividend on July 19th, 2023 which will be issued to investors who have ownership of shares as at July 5th, 2023. Furthermore, the value of that dividend stands at $0.287 per share, an increase from their previous payouts with an annualized basis yielding approximately 0.98%.
Although Zacks Research seems confident Choice Hotels International Inc. has what it takes to remain afloat and evolve effectively in the hospitality industry, other research analysts seem tepid about long-term investments in this hotel casino. In conclusion, wise investors should take note of the varying opinions and proceed carefully if interested in investing in this particular brand.
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