Zacks Analyst Blog Highlights: First Advantage, ChoicePoint, Starwood Hotels & Resorts, Marriott International and Hilton

Business Wire, Oct 29, 2007

CHICAGO -- Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: First Advantage Corp. (Nasdaq: FADV), ChoicePoint (NYSE: CPS), Starwood Hotels & Resorts (NYSE: HOT), Marriott International (NYSE: MAR) and Hilton (NYSE: HLT).

See the latest posts to the Analyst Blog by visiting: http://at.zacks.com/?id=2673

Here are highlights from Friday's Analyst Blog:

FADV a Hold After Earnings Results

We maintain our Hold rating on shares of First Advantage Corp. (Nasdaq: FADV) following the release of Q3 financial results. We believe the shares of First Advantage Corporation are appropriately valued near current levels. The shares of FADV are currently trading at a P/E multiple of 15.9x estimated 2007 EPS.

We believe that, given the present earnings growth outlook, and the uncertainty related to the company's exposure to the mortgage market, the current multiple is reasonable. Weakness in the Lender Services segment in particular during the quarter was a concern.

We note that ChoicePoint (NYSE: CPS), the company's closest publicly traded peer, is currently trading at approximately 21.8x consensus estimated 2007 EPS. Given the issues cited above, we feel that FADV should trade at a discount. Our $20.00 six-month target price for FADV is based on a P/E multiple of 17x estimated 2007 EPS.

Give Starwood a Premium Valuation

We maintain our Buy rating for Starwood Hotels & Resorts (NYSE: HOT) following the release of Q3 results. While the company's vacation ownership business continues to face a challenging operating environment, Starwood's hotel operations are delivering strong results with a healthy outlook going forward.

We continue to believe that Starwood deserves a premium valuation, given the company's well positioned portfolio and its increasing share of the North American travel market. Starwood is currently trading at approximately 10.5x our 2008 EBITDA estimate. Marriott International (NYSE: MAR) currently trades at approximately 10.2x our 2008 EBITDA estimate, and Hilton (NYSE: HLT) was recently acquired for greater than 12x our 2008 EBITDA projection.

Given the strength of the lodging sector and the quality of Starwood's portfolio, we believe that a premium valuation to the peer group average is warranted. Starwood has the best brands in the industry, and given its focus on the premium segments of the market, we consider the company to be well-positioned going forward.

We have lowered our six-month price target from $72 to $66, to reflect the weakness in the vacation ownership business. Even after this reduction, however, our target represents potential upside of nearly 20% from current levels. As such, we believe that the current share price represents an attractive entry point, and we reiterate our Buy rating. Our target price for HOT is based on an EV/EBITDA multiple of 12x our 08 EBITDA estimate.

See the latest posts to the Analyst Blog by visiting http://at.zacks.com/?id=2645

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