Credit Suisse ups target for CDL Hospitality to $2.63

Stock Name: CDL HTrust
Company Name: CDL HOSPITALITY TRUSTS
Research House: Credit Suisse

Credit Suisse has raised its target price for Singapore hotel owner CDL Hospitality Trusts (CDLT.SI) by 4% to $2.63 and maintained its outperform rating.

CDL Hospitality Trusts said on Wednesday it plans to acquire Studio M Hotel in Singapore for $154 million to tap into the city-state’s strong hospitality market.

Credit Suisse said it is positive on the deal as Studio M is a good asset, with an impressive occupancy of 88.9% in 2010 despitely operating only for seven months, and the average revenue per available room from June to December was $155.

The bank said it had raised its distribution per unit estimates by 3-4% for CDL’s 2011-2013 financial years to incorporate the acquisition, adding that the hotel owner is poised to benefit from the growth in Singapore visitor arrivals.

CDL’s share has fallen 4% in the last month, underperforming the broader Straits Times Index by 1%, and yields are now attractive at 6% for 2011, Credit Suisse said.

At 11:00 a.m., CDL shares were up 1% at $1.96 on a volume of 574,000 shares.