MarketsMOJO Downgrades Howard Hotels to 'Sell' 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 November 4th, 2024. This downgrade is due to 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. Additionally, Howard Hotels has a weak ability to service its debt, with a poor EBIT to Interest ratio of -0.27.
In the most recent quarter, the company's results were flat, with the lowest PBDIT and PBT LESS OI at Rs -0.50 cr and Rs -0.79 cr, respectively. The EPS also saw a significant decline, reaching its lowest at Rs -0.85. These factors contribute to the 'Sell' rating given by MarketsMOJO.

However, there are some bullish indicators for the stock. Technically, it is in a bullish range and has shown improvement since September 5th, 2024, generating a return of 13.17%. Additionally, multiple factors such as MACD, Bollinger Band, and KST are also bullish.

In terms of valuation, Howard Hotels has a fair valuation with a ROCE of 9 and an enterprise value to capital employed ratio of 2.2. The stock is currently trading at a discount compared to its historical valuations. However, despite generating a return of 87.67% in the past year, the company's profits have fallen by -101.7%.

The majority shareholders of Howard Hotels are the promoters, and the company has consistently outperformed the BSE 500 index in the last 3 annual periods. While the recent 'Sell' rating may be a cause for concern, it is important to note that the stock has shown consistent returns over the last 3 years. Investors should carefully consider these factors before making any decisions regarding Howard Hotels stock.