Choice Hotels lowers 2026 net income outlook to $230 mln-$241 mln from $265 mln-$275 mln
Company raises 2026 adjusted EBITDA guidance to $635 mln-$650 mln from $632 mln-$647 mln
Overview
U.S. lodging franchisor's Q2 revenue and adjusted EPS beat analyst expectations
Net income fell 21% yr/yr due to higher reimbursable deficits and SG&A expenses
Company returned $139 mln to shareholders via dividends and share repurchases year-to-date
Analyst coverage
The current average analyst rating on the shares is "hold" and the breakdown of recommendations is 3 "strong buy" or "buy", 9 "hold" and 4 "sell" or "strong sell"
The average consensus recommendation for the hotels, motels & cruise lines peer group is "buy"
Wall Street's median 12-month price target for Choice Hotels International, Inc. is $113.50, about 4.5% above its August 4 closing price of $108.61
The stock recently traded at 15 times the next 12-month earnings vs. a P/E of 13 three months ago
Result drivers and key details
Room openings — U.S. room openings increased 27% yr/yr, supporting improved net rooms growth
Franchise fees — Franchise and management fees rose 6%, driven by higher international royalty fees, franchisee programs and services revenue, and U.S. RevPAR and royalty rate improvement
Extended stay growth — U.S. extended stay net rooms grew 13% yr/yr, marking 12th consecutive quarter of double-digit growth
CHH•
