Choice Hotels initiated with an Underweight at Wells Fargo

Wells Fargo analyst Trey Bowers initiated coverage of Choice Hotels (CHH) with an Underweight rating and $84 price target While the shares “may look cheap” on EBITDA or price-to-earnings multiples, Choice’s free cash flow conversion remains under pressure, the analyst tells investors in a research note. Wells wants to see a fee growth inflection before recommending the stock.