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Hilton Worldwide Holdings Inc. (HLT), headquartered in McLean, Virginia, is a hospitality company that manages, franchises, owns, and leases hotels and resorts. Valued at $65.3 billion by market cap, the company provides hospitality services through various hotel brands, such as Waldorf Astoria, Hilton Hotels & Resorts, Home2 Suites by Hilton, and more as well as owns over 8,300 properties across 138 countries.
Companies worth $10 billion or more are generally described as “large-cap stocks,” and HLT perfectly fits that description, with its market cap exceeding this mark, underscoring its size, influence, and dominance within the lodging industry. Hilton's diverse brand portfolio, featuring Hampton and Hilton, showcases its robust market presence with a vast room network. The Hilton Honors loyalty program, boasting 195 million members, drives customer retention and attracts new guests, ensuring a steady revenue flow. With a growth in loyalty program membership, Hilton's customer base and market reach continue to expand.
Despite its notable strength, HLT slipped marginally from its 52-week high of $279.81, achieved on Sep. 5. Over the past three months, HLT stock has gained 9.9%, outperforming the S&P 500 Index’s ($SPX) 8.3% gains during the same time frame.
In the longer term, shares of HLT rose 12.4% on a YTD basis, underperforming SPX’s YTD gains of 10.4%. However, the stock climbed 30.4% over the past 52 weeks, outperforming SPX’s solid 20.1% returns over the last year.
To confirm the bullish trend, HLT has been trading above its 50-day and 200-day moving averages since early May, with slight fluctuations.
Shares of HLT plummeted 2.6% on Jul. 23 following its Q2 earnings report. The company's total revenue increased 6.3% year-over-year to $3.1 billion, driven by an 8.1% rise in franchise and licensing fees. Additionally, adjusted EBITDA grew 9.9% to $1 billion compared to the same quarter last year, and adjusted EPS of $2.20 rose 15.2%, exceeding consensus estimates of $2.04. Despite these favorable results, investor sentiment was likely dampened by lower system-wide occupancy rates and a decline in revenue per available room.
HLT’s rival, Marriott International, Inc. (MAR) shares lagged behind the stock, with a 3.9% downtick on a YTD basis and 17.8% gains over the past 52 weeks.
Wall Street analysts are reasonably bullish on HLT’s prospects. The stock has a consensus “Moderate Buy” rating from the 23 analysts covering it, and the mean price target of $279.52 suggests a potential upside of 1% from current price levels.
On the date of publication, Neha Panjwani did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
