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Investing.com - UBS lowered its price target on Choice Hotels (NYSE:CHH) to $149.00 from $160.00 on Thursday, while maintaining a Neutral rating on the hotel chain’s stock. According to InvestingPro data, the company maintains impressive gross profit margins of 89.4% and has consistently paid dividends for 22 consecutive years. InvestingPro analysis suggests the stock is currently trading near its Fair Value.
The price target reduction follows Choice Hotels’ first quarter results, with UBS citing concerns about domestic revenue per available room (RevPAR) performance for the remainder of 2025 due to challenging year-over-year comparisons. InvestingPro subscribers can access additional insights, including 8 more key tips about Choice Hotels’ performance and outlook.
UBS noted that Choice Hotels’ full-year 2025 domestic RevPAR guidance of -1% to +1% year-over-year implies approximately a 2% decline in domestic RevPAR for the rest of the year, with a range of -4% to -1%, following Q1 domestic RevPAR growth of 2.3%.
The research firm highlighted specific challenges including tougher comparisons as 2025 progresses, pointing out that the eclipse was a strong business driver in April 2024, and Easter provided a favorable calendar effect in April last year.
UBS continues to value Choice Hotels based on approximately 13-14 times its fiscal year 2026 estimated EBITDA, according to the research note.
In other recent news, Choice Hotels International Inc . reported its first-quarter results for 2025, revealing an adjusted earnings per share (EPS) of $1.34, slightly below the forecast of $1.38. The company’s revenue for the quarter reached $333 million, missing the anticipated $348.15 million. Despite these shortfalls, Choice Hotels demonstrated resilience with a 4% increase in adjusted EBITDA to $129.6 million and a 5% rise in adjusted EPS compared to the previous year. The company also set a full-year 2025 EPS guidance between $6.90 and $7.22. Additionally, shareholders have approved the company’s 2025 Long-Term Incentive Plan, which includes provisions for stock options and awards. In another development, JPMorgan initiated coverage on Choice Hotels with an underweight rating, citing the company’s modest growth outlook as a key factor. The bank noted that Choice Hotels’ projected growth rate is several hundred basis points below that of its competitor Wyndham Hotels & Resorts.
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