J.P. Morgan Raises PT On HOT To $71 From $66

J.P. Morgan is raising its PT on Starwood Hotels & Resorts HOT to $71 from $66. “Our year-end 2011 price target, which we derive by using a blended net asset value/sum-of-the-parts approach,” J.P. Morgan writes. “We value HOT's owned hotels at ~$330,000 per key (up from ~$317,500 per key), its managed and franchised fee-related business at 15.0x our 2012E estimates, its timeshare business at 6.0x our 2012E estimates (or 1 times timeshare book value), and unallocated expenses at 12.7x, less net debt (including HOT's share of JV debt). “We believe this valuation is consistent with H (HOT's closest comparable), HOT's lodging REIT peers (with regard to owned-hotel per key valuation), and MAR (with regard to fees and timeshare valuation). At current levels, HOT trades at 14.4x 2011E EV/EBITDA and 11.7x 2012E EV/EBITDA. Our $71 price target implies that HOT can trade at 13.3x our 2012E EV/EBITDA.” Starwood Hotels & Resorts currently trades at $60.55.