Tuesday, an analyst from Baird adjusted the price target for Choice Hotels (NYSE:CHH) International, Inc. (NYSE:CHH) to $140.00, marking a slight increase from the previous $138.00 target.
This adjustment comes as the firm maintains an Outperform rating on the stock. The move follows the announcement that Choice Hotels' exchange offer for shares of Wyndham Hotels & Resorts (NYSE:WH) has expired, and the company is retracting its proposed slate of directors.
The analyst noted that the termination of the hostile takeover bid for Wyndham Hotels should lead to a positive response in Choice Hotels' shares. The pursuit of Wyndham had been a point of concern for investors, drawing attention to the potential risks and uncertainties associated with the deal.
With the offer now off the table, the analyst anticipates an improvement in both the valuation of Choice Hotels and investor sentiment, which had been negatively skewed due to the takeover attempt.
The analyst also highlighted the company's underlying growth potential, suggesting that the stock has room to grow independently of the failed Wyndham acquisition. The assessment is that Choice Hotels possesses a strong stand-alone growth profile that could support the stock's rise to the newly established price target of $140.00.
The update on Choice Hotels' strategic decisions and the subsequent analysis by Baird is expected to influence the market's view of the stock. With the withdrawal from the Wyndham bid, Choice Hotels may now focus on its core business strategies without the overhang of a potential merger.
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