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McLean, Virginia-based Hilton Worldwide Holdings Inc. (HLT) is a hospitality company that manages, franchises, owns, and leases hotels and resorts. Valued at a market cap of $63 billion, the company’s portfolio includes various leading brands spanning luxury, full-service, lifestyle, and extended-stay segments, such as Waldorf Astoria, Conrad, Hilton Hotels & Resorts, DoubleTree by Hilton, Embassy Suites, and Hampton by Hilton.
This hospitality company has outpaced the broader market over the past 52 weeks. Shares of HLT have soared 27.1% over this time frame, while the broader S&P 500 Index ($SPX) has gained 16.4%. However, the stock is up 8.3% on a YTD basis, underperforming the SPX’s 9.7% rise.
Zooming in further, HLT has surged past the AdvisorShares Hotel ETF’s (BEDZ) 20.6% uptick over the past 52 weeks and marginal loss on a YTD basis.
Shares of HLT plunged 2.6% on Jul. 23, after its Q2 earnings release. The company’s total revenue improved 6.3% year-over-year to $3.1 billion, with its franchise and licensing fees rising by 8.1%. Moreover, compared to the year-ago quarter, its adjusted EBITDA grew 9.9% to $1 billion, while its adjusted EPS of $2.20 advanced 15.2%, topping consensus estimates of $2.04. However, despite these positive results, investor sentiment may have been negatively affected by lower system-wide occupancy and a decline in revenue per available room.
For the current fiscal year, ending in December, analysts expect HLT’s EPS to grow 11.8% year over year to $7.96. The company’s earnings surprise history is promising. It topped the consensus estimates in each of the last four quarters.
Among the 23 analysts covering the stock, the consensus rating is a "Moderate Buy” which is based on eight “Strong Buy,” three "Moderate Buy,” and 12 “Hold” ratings.
This configuration is slightly more bullish than two months ago, with seven analysts suggesting a “Strong Buy” rating.
On Jul. 30, Raymond James Financial, Inc. (RJF) maintained an “Outperform" rating on HLT and raised its price target to $300, implying a 12.1% potential upside from the current levels.
The mean price target of $278.65 represents a 4.1% premium from HLT’s current price levels, while the Street-high price target of $340 suggests an ambitious upside potential of 27%.
