Nov 4 (Reuters) - Shares of Orient-Express Hotels Ltd OEH.N fell 18 percent to their lowest level in more than 5 years on Tuesday, a day after the company posted weak quarterly results and said it will suspend its quarterly dividend starting in 2009.
Third-quarter results at the company, which operates luxury hotels, restaurants, tourist trains and river cruise businesses, showed clear evidence that the global economic slowdown has taken a firm hold in Europe, Deutsche Bank analyst Chris Woronka wrote in a note dated Nov. 3.
While Woronka cut his price target on the company’s stock by $5 to $15, S&P Equity Research downgraded Orient-Express to “buy” from “strong buy” and cut its price target by $10 to $16.
Orient-Express, whose bigger rivals include Marriott International Inc MAR.N and Starwood Hotels & Resorts Worldwide Inc HOT.N, saw just 6 percent growth in revenue from Europe during the quarter, a fall from 11 percent in the preceding quarter and 28 percent in the first quarter.
The company’s measures underscore the severity of the situation it faces over the next 12 to 24 months, as “we believe the luxury travel sector will be hit disproportionately hard by the economic malaise,” Woronka, who has a “hold” rating on the stock, said.
On Monday, Orient-Express also said it will delay some of its hotel projects to improve cost efficiencies. [ID:nBNG66971]
Shares of the company touched a low of $9.61, before recovering some losses to trade down $1.73 at $10.00 Tuesday afternoon on the New York Stock Exchange. They have lost almost 80 percent of their value through Monday this year. (Reporting by Dilipp S Nag in Bangalore; Editing by Pratish Narayanan)