UPDATE: MLV Initiates Coverage On Ashford

Ryan Meliker of MLV & Co initiated coverage of Ashford Inc. (NYSE: AINC) on Friday with a Buy rating and $110 price target.

“Our Buy rating is driven by our confidence in management's ability to grow assets under management, which in turn will growth Ashford's earnings per share at a disproportionate rate,” Meliker wrote. The analyst adds that his confidence is driven by a positive view of lodging stocks as 100 percent of the company's fee stream is derived from the sector.

Meliker is forecasting assets under management growth of $728 million in 2015 and another $690 million in 2016. The analyst adds that the goals are attainable and that “we believe this is a trust in management story” given a strong track record of generated shareholder value.

The analyst also notes that the company's pro-forma operating margin of 11 percent is “well below” the industry average of nearly 40 percent which will allow the company to leverage costs to produce “disproportionate growth” in earnings relative to assets under management.