MarketsMOJO Downgrades Howard Hotels Due to Weak Fundamentals and Debt Concerns

Howard Hotels, a microcap company in the hotel, resort, and restaurant industry, has recently received a 'Sell' rating from MarketsMOJO on October 21, 2024. This downgrade is based on the company's weak long-term fundamental strength, as evidenced by its operating losses and poor long-term growth rate of only 5.35% over the last 5 years.
One of the main concerns for Howard Hotels is its ability to service its debt, with a low EBIT to Interest ratio of -0.27. This indicates that the company may struggle to make interest payments on its debt, which could lead to further financial difficulties.

In addition, the company's recent financial results for the quarter ending June 2024 have been flat, with the lowest PBDIT and PBT LESS OI in the last 5 years. The EPS for the quarter was also at its lowest at Rs -0.85.

However, there are some positive factors to consider. The stock is currently in a bullish range and has shown a 2.49% return since September 5, 2024. Technical indicators such as MACD, Bollinger Band, KST, DOW, and OBV are also showing bullish signals.

Furthermore, Howard Hotels has a fair valuation with a ROCE of 9 and a 2 Enterprise value to Capital Employed. The stock is also trading at a discount compared to its historical valuations.

It is worth noting that the majority shareholders of Howard Hotels are promoters, which could potentially impact the company's decision-making and direction.

Despite the recent downgrade, Howard Hotels has shown market-beating performance in the long term, generating a return of 70.82% in the last year and outperforming BSE 500 in the last 3 years, 1 year, and 3 months. However, investors should carefully consider the company's financial health and future prospects before making any investment decisions.