Choice Hotels: Strong FY2024 Earnings, But I Don't Buy The Guidance

Nikola Lapenna
153 Followers
(9min)

Summary

  • CHH had a strong 2024, but 2025 looks shaky due to a weak CAD dollar and tariff threats impacting Canadian travel to the U.S.
  • Recent earnings were solid, with net income up 16% and EPS up 22%, but guidance for 2025 seems overly optimistic.
  • The Canadian travel decline could reduce CHH's revenue, leading to a projected 0.5% revenue decline in 2025.
  • I rate CHH a Hold with a $135 price target, given the risks and limited growth prospects for 2025, but noting a solid pipeline for the future.

Radisson Blu Royal Viking hotel

Roland Magnusson/iStock Editorial via Getty Images

Introduction

I previously wrote about Choice Hotels International (NYSE:CHH) last month heading into earnings. At the time, I noted that while earnings may look ok, I'm concerned that this tariff war will see Canadians

This article was written by

153 Followers
With over three years of finance and consulting experience, Nikola is laser focused on finding value in North American public equities that don't have a ton of hype. His professional experience includes corporate credit risk analysis, consulting for government entities, and venture capital analysis in the med-tech space. An avid golf fan, Nikola enjoys picking stocks that need a "mulligan"; a sluggish quarter that sees market sentiment trend downward doesn't scare Nikola. Nikola is not a licensed financial advisor and nothing in his commentary here on Seeking Alpha should be regarded as advice. All of his opinions are his own, and not on behalf of any other entities.

Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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