) to outperform from peer perform.
Analyst Jake Fuller says that lodging trends appear to have bottomed in April, and sees a two-stage recovery over the next 21 months. He says each percentage point the company's RevPAR (revenue per available room) grows should add $0.01-$0.02 to quarterly earnings per share. Fuller sees EPS of 48 cents in 2003 and 62 cents in 2004. He notes the stock is trading at a discount to hotels, despite its less capital-intense model, early cycle characteristics, and growing Internet business. The analyst sees the premium restored as the Internet business gains visibility. Fuller thinks Pegasus is probably the best way to increase lodging exposure, given limited near-term visibility on industry trends. He has a $20 12-month target.