We're hosting a call today, September 22nd at 11:00am EDT to review our thesis in depth.
Amid a very favorable fundamental backdrop for domestic hotels, RHP is the REIT with the greatest exposure to the group lodging segment. Our research indicates the group trends could be stronger than investor expectations this year and next. Indeed, we expect Q3 and Q4 earnings beats for RHP and we enter the 2015 fray above the Street once again. RHP appears undervalued versus its comp space and with the potential for major dividend increases and better earnings. As a result, we see the potential for a total return of 40% over the next 12-18 months.
THESIS OVERVIEW:
- Investors should be bullish regarding RHP's leading exposure to the group lodging segment
- Our primary research suggests the group outlook is stronger than the current consensus view and should lead to positive 2014 and 2015 earnings revisions
- Street overestimating share count, resulting in a $0.25-0.45 AFFO/share understatement on the incorrect share count alone
- Marriott affiliation is an advantage that offsets the single tenant risk
- EV/EBITDA valuation discount of over 3 turns looks attractive
- A likely dividend hike that should improve current yield of 4.8% - already above industry average
CALL DETAILS
Attendance on this call is limited. Please note if you are not a current subscriber to our Gaming, Lodging, and Leisure research there will be a fee associated with this call. Ping for more information.
