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On Friday, Jefferies analyst David Katz adjusted the price target on Hyatt Hotels Corporation (NYSE:H) shares, reducing it to $161 from the previous $176, while maintaining a Hold rating on the stock. The revision comes as Hyatt's shares have taken a significant 10% hit over the past week, currently trading at $147.38. According to InvestingPro data, analyst targets for the stock range from $145 to $201, reflecting mixed sentiment. Katz noted that the current quarter might be challenging for investors to navigate due to the company's active period of asset sales and acquisitions, which could be affecting its growth trajectory.
Katz pointed out that the intricacies of Hyatt's recent business activities might require time for investors to fully understand their impact on the company's stock. He suggested that due to these complexities, the valuation of Hyatt shares might face some pressure in the market. This comes despite Hyatt's impressive gross profit margins of 69% and management's aggressive share buyback program, as revealed by InvestingPro's analysis.
The analyst's assessment of Hyatt's stock value is based on an expected EBITDA multiple of approximately 14.5 times for the year 2025. Katz reiterated the Hold rating, indicating that he does not see significant movement in either direction for the stock at the moment.
Hyatt Hotels Corporation, known for its global hospitality services, is in the midst of reshaping its portfolio through strategic sales of assets and targeted acquisitions. These moves are intended to set the company on a path for growth, but as Katz mentioned, may also contribute to a period of adjustment for the market.
The revised price target reflects the potential challenges and uncertainties surrounding Hyatt's current strategic decisions. As the company continues to navigate through this transitional phase, investors and analysts will likely monitor the effectiveness of Hyatt's strategy and its impact on the company's financial performance.
In other recent news, Hyatt Hotels Corporation faced a cut in its target price to $151 by Barclays (LON:BARC), maintaining an Equalweight rating. This adjustment followed Hyatt's Q4 earnings and a less optimistic outlook for 2025. Analyst Brandt Montour of Barclays attributed the lower target to Hyatt's Q4 earnings before interest, taxes, depreciation, and amortization (EBITDA) not meeting expectations and a weaker-than-expected net unit growth (NUG) guidance of 4-5%.
Recently, Hyatt Hotels also reported Q4 2024 earnings that fell short of analyst expectations, posting adjusted earnings per share of $0.42, missing the consensus estimate of $0.79. The company's revenue for the quarter was $1.72 billion. For the full year 2024, Hyatt reported a net income of $1.3 billion and adjusted EBITDA of $1.1 billion.
In other developments, Hyatt has entered an agreement to acquire Playa Hotels & Resorts for approximately $2.6 billion including debt. The company projects 2025 full year comparable system-wide hotels RevPAR growth of 2.0% to 4.0% and net rooms growth of 6.0% to 7.0%. Hyatt further expects 2025 adjusted EBITDA between $1.1 billion and $1.15 billion.
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