Stock Research and Analysis

by Dan Wasiolek

Bulls Say

Starwood is well diversified globally, which positions this narrow intangible brand well to benefit from the increasing global travel of consumers.
Since 2009 and through 2014, industry supply is up midsingle digits while demand is up over 20%, supporting an elongated cycle of strong RevPAR growth.
Starwood has exposure to recurring managed and franchised fees (94% of total 2014 rooms), which have high switching costs and generate strong ROICs. Read more 

Bears Say

Independent hotels and home and vacation rentals present an increasing competitive threat, and the advancement of technology and its use by next-generation travelers increase the access and awareness of these properties.
Starwood is not trading at an attractive valuation, and investors are pricing in overly optimistic expectations for RevPAR growth, as of this writing.
Starwood's recent room and pipeline growth has slowed, which we believe is an execution issue. The company is searching for a new CEO, who will be expected to improve several key growth metrics. Read more 

Management

Management has recently underdelivered on room growth, asset sales, and shareholder return expectations. As a result, after being CEO since September 2007, Frits van Paasschen and the board of directors mutually decided in early 2015 to search for Starwood's   Read more 

Profile

Starwood Hotels & Resorts Worldwide operates 1,236 properties and 356,000 rooms across 10 brands, predominantly in the luxury and upper upscale segments. Sheraton, Westin,  Read more 

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