Hudson Securities Raises The PT On Starwood Hotels To $72

Starwood's HOT 4Q adjusted EPS beat Hudson Securities' by a dime. The beat was broad-based and came from both owned hotels and the fee businesses and HOT also raised guidance. The stock opened strong, but sold off after HOT addressed their exposure to North Africa and other minor potholes in the geopolitical realm. These issues pale in comparison to HOT's compelling growth story. Hudson upped its estimates and target price $8 to $72 and Reiterate a Buy. HOT is poised to benefit from trends in developed and emerging markets. HOT expects similar RevPAR gains from each, but characteristically the two will differ. Developed markets will see higher RevPAR as modest demand growth coupled with no supply growth compresses occupancies and drives up rates. Emerging markets will see high supply growth, but very strong demand will drive rates and occupancies. HOT is well positioned in both market types. Hudson has increased its 2011 and 2012 estimates to reflect HOT's bullish outlook. We are at the high-end of 2011 guidance and above the Street for 2012. It has modeled Bal Harbour running through the P&L in 2012, however Hudson doesn't believe the Street is doing this. HOt is trading higherat $60.74