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Baird raises Hilton shares price target to $215 on strong earnings

Published 25/04/2024, 14:13

On Thursday, Baird, a financial services firm, has adjusted its price target for Hilton Worldwide (NYSE:HLT), increasing it from $212 to $215 while maintaining an Outperform rating on the shares. The adjustment follows Hilton's first-quarter earnings for 2024, which surpassed expectations despite a slower growth in Revenue per Available Room (RevPAR) within the domestic market.

The analyst at Baird noted that the fundamental outlook for the near term remains largely unchanged and highlighted the positive impact of the hotel chain's ongoing momentum in terms of new signings, construction starts, and property openings. The emphasis was on the net unit growth, which is anticipated to be a significant driver for both earnings and the company's valuation multiple going forward.

According to the analyst's commentary, Hilton's financial estimates are on the rise, albeit slightly affected by incremental foreign exchange headwinds. The report further detailed that Hilton's fees and earnings are growing above the expected algorithm, and the acceleration in net unit growth is notable. Additionally, the benefits and synergies from the brand and loyalty programs are reportedly increasing.

The analyst's statement underscored the company's performance by saying, "Estimates are moving higher, fees and earnings are growing above algorithm, net unit growth is accelerating, and brand and loyalty benefits/synergies are increasing." This suggests a robust financial and operational position for Hilton Worldwide, as observed in the first quarter of 2024.

Hilton Worldwide's stock performance and future prospects are closely watched by investors, with the latest price target update reflecting confidence in the company's continued growth trajectory and operational success.

InvestingPro Insights

Following the positive outlook from Baird, real-time data from InvestingPro further supports the potential of Hilton Worldwide (NYSE:HLT). The company boasts an impressive gross profit margin of 74.87% as of the last twelve months leading up to Q1 2024, indicating strong operational efficiency. Additionally, Hilton has experienced a substantial 36.01% price total return over the past six months, showcasing significant investor confidence and market performance.

InvestingPro Tips highlight that Hilton operates with a moderate level of debt and has been profitable over the last twelve months, which could provide investors with a sense of stability and reliability. However, it's worth noting that the stock is trading at a high earnings multiple with a P/E ratio of 42.73, suggesting that the market may have high expectations for future earnings growth. For a deeper dive into Hilton's financials and to access more InvestingPro Tips, including the four analysts who have revised their earnings downwards for the upcoming period, visit InvestingPro. There are 12 additional tips available on InvestingPro that could give you a more comprehensive view of Hilton's investment potential.

For those looking to make the most informed investment decisions, consider using the exclusive coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription on InvestingPro. This could be an opportune moment to leverage the insights offered by InvestingPro, especially when evaluating the future prospects of Hilton Worldwide in the hospitality industry.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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