Starwood backs 2010 outlook, to continue property sales

WHITE PLAINS, NEW YORK Starwood Hotels & Resorts Worldwide Inc. has reaffirmed its 2010 outlook and expects to accelerate its asset-light strategy as the economy rebounds.

In a Wednesday analyst conference call, Starwood said its annual earnings per share will likely grow from 35% to 42% over the next three years. Starwood, which forecast a 7% to 9% rise in global RevPAR this year, said RevPAR will likely increase in that range through 2013.

The company also reiterated its strategy to reduce real estate assets to a point where franchise fees comprise 80% of revenue.

Analysts seemed approving of Starwood’s story. Jefferies analyst David Katz placed a “buy” rating on the company following the call. “The shares of Starwood are among the most compelling in our large-cap group given the operating leverage and underlying asset value,” Katz said in an investor note.

Similarly, J.P. Morgan analysts believe Starwood’s extensive presence in emerging markets, coupled with improving demand, should spur strong gains in owned hotel operating profit. Additionally, “we think the meeting highlighted its bench of lodging professionals worldwide, something we view as not appreciated by investors,” a J.P. Morgan investor note said.