FBR Capital Reiterates a Buy Rating on Felcor Lodging Trust

By Jason Carr

In a report released yesterday, Bryan Maher from FBR Capital reiterated a Buy rating on Felcor Lodging Trust (NYSE: FCH), with a price target of $8. The company’s shares closed yesterday at $6.23.

Maher noted:

“FelCor posted 3Q16 results that were in line with consensus, although just shy of our estimates. The REITs hotels in key markets like New York, Boston, Houston, and San Francisco experienced soft transient and group business. It is no surprise that New York and Houston were weak, as these market challenges are widely known. However, industry-wide, group was generally solid in 3Q—albeit somewhat dependent on where conventions were held relative to REIT hotel ownership. FelCor’s same-store RevPAR declined 0.7%, versus +3.3% for the U.S. on the whole. In addition to New York and Houston headwinds, adverse weather in the Southeast also impacted FelCor’s results. Offsetting the weaker RevPAR were cost control initiatives (labor, marketing, and utilities), along with lower OTA commissions, a result of the brand direct booking programs that have been put in place. On the earnings call, management was not willing to engage in activist shareholder dialogue and also stated that the search for a new CEO was ongoing and that no further information would be available until a replacement is named. We admit FelCor has become a bit of a “show me” story, but we find the shares attractive on an underlying asset basis.”

According to TipRanks.com, Maher is a 1-star analyst with an average return of -4.9% and a 28.6% success rate. Maher covers the Financial sector, focusing on stocks such as Government Properties Income Trust, Retail Opportunity Investments, and Ashford Hospitality Trust.

Felcor Lodging Trust has an analyst consensus of Moderate Buy, with a price target consensus of $7.50.

The company has a one year high of $8.58 and a one year low of $5.47. Currently, Felcor Lodging Trust has an average volume of 1.18M.

Based on the recent corporate insider activity of 54 insiders, corporate insider sentiment is positive on the stock. This means that over the past quarter there has been an increase of insiders buying their shares of FCH in relation to earlier this year. Most recently, in May 2016, Mark Rozells, a Director at FCH bought 10,000 shares for a total of $68,800.

FelCor Lodging Trust, Inc. is a real estate investment trust. Its portfolio primarily consists of upper-upscale, full-service hotels that are located throughout the United States and Canada. The company’s portfolio consists of upper upscale hotels, which are flagged under global brands such as Embassy Suites Hotels, Doubletree, Hilton, Marriott, Renaissance, Sheraton, Westin and Holiday Inn. FelCor Lodging Trust was founded by Thomas J. Corcoran, Jr. and Hervey A. Feldman in 1991 and is headquartered in Irving, TX.