In a recent stock transaction, Patrick Cimerola, the Chief Human Resources Officer at Choice Hotels International Inc . (NYSE:CHH), sold a portion of his holdings in the company. According to the SEC filing, Cimerola sold 27 shares of the company's common stock at a price of $150 per share, totaling $4,050. This transaction was conducted under a 10b5-1 trading plan, which was adopted by Cimerola earlier this year on March 14, 2024.
Additionally, Cimerola exercised stock options to acquire 27 shares at a price of $81.55 per share, amounting to a total value of $2,201. Following these transactions, Cimerola's direct ownership in Choice Hotels stands at 18,075 shares.
In other recent news, Choice Hotels International, Inc. reported robust third-quarter performance, surpassing estimates with significant growth in adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) and earnings per share (EPS). The company raised its full-year guidance for adjusted net income and EPS, projecting a 10% growth in adjusted EBITDA. Baird has shown confidence in the company's trajectory, raising the price target to $145 from $138, while maintaining an Outperform rating. On the other hand, Jefferies revised its rating from Buy to Hold, and Goldman Sachs maintained a Sell rating, despite increasing the price target.
The company's global hotel pipeline expanded to over 110,000 rooms, marking an 11% year-over-year increase. Choice Hotels opened 75% more hotels globally compared to the same quarter the previous year and noted a 1.8% net increase in global rooms in more revenue-intensive brands. These recent developments indicate a robust performance and potential for future growth for Choice Hotels.
However, Goldman Sachs expressed concern about the deceleration of the company's global pipeline for the second quarter in a row this year. The firm also highlighted that the third-quarter earnings beat was driven largely by specific financial adjustments. Despite these factors, Goldman Sachs remains cautious, particularly concerning the timing of when the reduced marketing spend might reverse and any potential effects on franchisee feedback.
InvestingPro Insights
Choice Hotels International Inc. (NYSE:CHH) continues to demonstrate strong financial performance, as reflected in recent InvestingPro data. The company boasts a market capitalization of $6.73 billion and an impressive gross profit margin of 89.74% for the last twelve months as of Q3 2024. This aligns with one of the InvestingPro Tips, which highlights Choice Hotels' "impressive gross profit margins."
The stock's recent performance has been noteworthy, with a 24.37% price total return over the past year. Currently trading at $139.46, CHH is near its 52-week high, with the price at 96.49% of its peak. This strength is further supported by another InvestingPro Tip indicating that the company has "maintained dividend payments for 21 consecutive years," showcasing its commitment to shareholder returns.
While Patrick Cimerola's recent stock transaction was relatively small, it's worth noting that management has been "aggressively buying back shares," according to an InvestingPro Tip. This could signal confidence in the company's future prospects and potentially support the stock price.
Investors seeking a more comprehensive analysis can access additional insights through InvestingPro, which offers 8 more tips for Choice Hotels International Inc.
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