Goldman Sachs Reiterates Buy on 7 Days Group Holdings

Goldman Sachs maintains its Buy rating on 7 Days Group Holdings (NYSE: SVN).

In a note to clients, Goldman Sachs writes, "7 Days Group has outperformed peers by 34% since the beginning of November and we believe this will continue as investors are likely to favor its (1) most stable 4Q2010 margins and (2) largest realized L/O openings ytd and (3) fastest 2011E EBITDA growth among peers. Moreover, we think the upcoming release of data points on November's hotel operations will be relatively more positive to 7 Days when compared to China Lodging and Home Inns due to benefit from the Asia Games and the end of Shanghai World Expo. We believe 7 Days is attractively valued at 0.5X EV/EBITDA/G, or 14X/11X EV to 2011E/12E EBITDA, amid rapid growth pace. Reiterate C. Buy.

Goldman Sachs increases its price target on SVN from $30 to $31.