Mizuho cuts Hilton stock rating, raises target to $263

On Wednesday, Mizuho (NYSE:MFG) Securities adjusted its stance on Hilton Worldwide Holdings Inc. (NYSE:HLT), downgrading the hotel giant’s stock rating from Outperform to Neutral. Despite the downgrade, the firm increased its price target for Hilton from $243.00 to $263.00. The revision reflects a slightly improved outlook for the U.S. revenue per available room (RevPAR), a key performance metric in the hotel industry. The company maintains impressive gross profit margins of 76%, according to InvestingPro data.

Mizuho’s analysts cited valuation concerns as the primary reason for the downgrade, noting that Hilton’s stock had significantly outperformed the market in 2024 and continued to show gains in the early part of 2025. Hilton shares rose approximately 37% in 2024, compared to the S&P 500’s 23% increase, and have already added another 5% year-to-date in 2025, outpacing the S&P 500’s 2.66% gain.

The analysts acknowledged Hilton’s status as one of the highest-quality businesses within their coverage area, which is supported by InvestingPro’s "GREAT" overall financial health score. Nevertheless, they expressed the belief that the current valuation is full, with the stock price having reached and even surpassed their previous target. This assessment suggests that there may be limited room for further upside to the consensus estimates for Hilton in 2025 and 2026.

In their commentary, Mizuho analysts stated, "We are downgrading shares of HLT from Outperform to Neutral, largely on valuation, and increasing our Price Target (NYSE:TGT) to $263 (from $243) on what appears to be a marginally better US RevPAR environment." They elaborated on the company’s solid performance but indicated caution moving forward due to the stock’s recent price movements and their implications for future growth potential.

The price target increase to $263.00 represents Mizuho’s updated expectation for Hilton’s stock value, taking into account the improved industry conditions. However, the downgrade to Neutral signals a shift in their recommendation, suggesting that investors may no longer expect the same level of outperformance that was seen in the previous year.

In other recent news, Hilton Worldwide Holdings Inc. announced significant developments regarding its executive team and financial strategies. The company disclosed the resignation of Michael W. Duffy, Senior Vice President, Chief Accounting, and Risk Officer, effective February 7, 2025. Following Duffy’s departure, Misha Moylan, currently Senior Vice President of Internal Audit and Enterprise Risk Management, will assume the role of Senior Vice President, Chief Accounting Officer. Hilton emphasized that these changes are not indicative of any internal disagreements or conflicts.

In addition to the executive transition, Hilton has expanded its stock repurchase program, with the Board of Directors authorizing an additional $3.5 billion for future repurchases. This increment brings the total funds available for buybacks to approximately $4.8 billion. The execution of these repurchases will be contingent on various factors including market conditions, liquidity availability, and cash flow.

These recent developments come as Hilton continues to navigate the competitive landscape of the hotels and motels industry. The company has not indicated any further organizational changes at this time. The aforementioned information is based on press release statements from the company.

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