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Industry: Lodging Company: Starwood Hotels and Resorts

Industry: Lodging Company: Starwood Hotels and Resorts Module 5: Valuation Using Forecasts of Cash Flows. Sarah Weatherburn. Comparable Companies . About Starwood Hotels. Nearly 1,200 Properties in 100 countries

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Industry: Lodging Company: Starwood Hotels and Resorts

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  1. Industry: Lodging Company: Starwood Hotels and Resorts Module 5: Valuation Using Forecasts of Cash Flows Sarah Weatherburn

  2. Comparable Companies

  3. About Starwood Hotels • Nearly1,200 Properties in 100 countries • 74 new hotels in 2013, representing approximately 16,200 rooms in 22 countries • Low growth expected in America – focusing on Upper Scale Luxury Hotels • Expanding Reach in Higher Growth Markets – • China & the rest of Asia, Middle East/Africa, and Latin America

  4. Revolution in Global Travel

  5. Positioned to Take Advantage

  6. Starwood Multiyear Forecasts Sales Growth Rate - 8% Enterprise Profit Margin - 7% Enterprise Asset Turnover – 1.25

  7. DCF Model – 11.67%

  8. Residual Enterprise Income Model – 11.67%

  9. NEW FORECAST • Sales Growth Rate - 11% • Enterprise Profit Margin - 9% • Enterprise Asset Turnover - 1.25

  10. Updated DCF Model

  11. Updated REI Model

  12. Abnormal Enterprise Income Growth Model

  13. Choosing a Valuation Model Does not capture value added

  14. My Recommendations/Concerns • Stock Price per Yahoo Finance – $78.08 • Our Valuation – $74.04 • 2013 Financial Statements – Not included in this valuation yet…..working on getting my valuation updated. • Could affect – my forecast numbers

  15. Questions?

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