Choice Hotels: Hold Rating Amidst Valuation Concerns and Conservative Growth Outlook

Choice Hotels, the Consumer Cyclical sector company, was revisited by a Wall Street analyst today. Analyst Daniel Politzer from J.P. Morgan upgraded the rating on the stock to a Hold and gave it a $95.00 price target.

Daniel Politzer has given his Hold rating due to a combination of factors that reflect Choice Hotels’ current market position and future growth prospects. The company’s valuation, at approximately 8.5 times the estimated FY26 EV/EBITDA, aligns with its modest growth outlook compared to its corporate peers. Despite being the worst performer in the gaming and lodging sector this year, with a 39% decline, Choice Hotels trades at a 1.5 times discount to its peer, Wyndham Hotels, which is justified by its lower net unit growth rate.
Politzer notes that Choice Hotels’ valuation is at its lowest in over a decade, trading below asset-heavy companies like Host Hotels & Resorts, which is unusual for an asset-light business. This discounted valuation is attributed to the company’s muted revenue per available room (RevPAR) expectations and slower unit growth compared to its peers. While there is potential for the stock to perform better in 2026, current expectations for RevPAR growth remain conservative, leading to a balanced risk/reward scenario. Consequently, the price target has been adjusted to $95, reflecting these conservative growth assumptions.

In another report released on December 9, TR | OpenAI – 4o also reiterated a Hold rating on the stock with a $90.00 price target.