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'Ready to fly' once travel resumes: DBS on ARA US Hospitality Trust

Jovi Ho
Jovi Ho1/7/2021 11:38 AM GMT+08  • 5 min read
'Ready to fly' once travel resumes: DBS on ARA US Hospitality Trust
The brand names of the hotels in its portofolio, including Hyatt and Marriott, are a bright spot for the Trust.
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As the grounded aviation sector takes to the skies once again, ARA US Hospitality Trust (A-HTrust) is “ready to fly” with its portfolio of 41 upscale hotels eager to welcome guests post-Covid-19, say DBS Group Research analysts Geraldine Wong and Derek Tan.

In a Jan 7 note, the analysts initiated coverage on the Singapore-listed stapled security, which comprises ARA US Hospitality Property Trust (ARA H-REIT) and ARA US Hospitality Management Trust (ARA H-BT). Wong and Tan are recommending investors to accumulate on the Trust with a "buy" rating and a target price of 69 US cents (91 cents).

“With the progressive rollout of Covid-19 vaccines in the US, we believe that the worst for the Trust is over and investors are not pricing in its ability to double its earnings over the next two years. We are attracted by AUHT’s potential to generate normalised yields of more than 15% from FY2023 as earnings recover,” they write.

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