Importantly, approximately 70 percent of the rooms in the pipeline are in the upper upscale or luxury segments, and more than 50 percent of the rooms are located outside the United States.
Starwood has the best brands in the industry, in our opinion, and given its focus on the premium segments of the market, we consider the company to be well-positioned going forward. We are also encouraged by the continued focus on managing its unique brands, returning value to shareholders, and the pending introduction of new brands such as aloft and Element.
Given the quality of Starwood's portfolio, we believe that a premium valuation to the peer group average is warranted. While Starwood is currently trading at approximately 8.0x our 2008 Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) estimate, Marriott International (MAR) trades at approximately 8.2x our 2008 EBITDA estimate.
Even in the weakening hotel operating environment, we believe that the recent pullback has been overdone, and we consider shares of Starwood Hotels to be attractive. Our price target of $45 per share reflects an enterprise value/EBITDA multiple of 10x our 2008 EBITDA estimate.
Telus Fighting Canadian Churn
We maintain our Hold rating on Telus Corp. (TU), the second largest telecommunications provider in Canada. Recent results demonstrate strong wireless data revenues and high-speed Internet subscriber growth, although increasing customer retention costs coupled with the introduction of Wireless Number Portability (WNP) related churn remain challenging.
Telus strategizes to offset erosion in its core ILEC customer segment with new Internet-based communications and content-oriented (video and advanced application) services. In late March 2008, Telus launched a new and distinctive wireless value brand and service called Koodo Mobile as an attempt to counter competition. We further believe that new revenue sources derived from Telus TV and other broadband data content services may propel overall operating performance on full deployment of these initiatives.
We are impressed by management's commitment to return enhanced value to shareholders through continued share buyback programs and attractive dividend payouts. Meanwhile, the business landscape in Canada is changing with major cable and wireless initiatives competing for the same consumer base. We are encouraged by Telus wireless business prospects, but remain cautious about continued access line erosion in the wireline segment.
Telus is trading at 10.4x our 2008 earnings estimate, which represents a discount to the industry group as well as to the S&P 500. On the basis of enterprise value (EV) to EBITDA, the stock is trading at 4.3x estimated 2008 EBITDA, which is at a slight discount to the peer group average. Our US$ 39.00 six-month target price is based on 11x 2008E EPADS or 4.5x 2008 EV/EBITDA.
