Bernstein Ranks the Top Hotel Stocks Among Global Hospitality Leaders

Investing.com -- The global hotels and leisure sector presents diverse investment opportunities as major chains navigate post-pandemic recovery and strategic growth initiatives.

According to Bernstein’s latest analysis, certain hotel stocks stand out for their potential returns and operational strengths heading into 2025 and beyond.

Bernstein’s ranking of top hotel stocks highlights companies with strong fundamentals and promising capital return strategies:

Hyatt (NYSE:H) emerges as Bernstein’s top pick despite recent underperformance driven by capital allocation concerns.

While investors noted the modest $300 million shareholder return (just 2.2% of market cap), Bernstein forecasts this buyback could double by 2026 based on rising free cash flow.

Up to eight property disposals expected by the end of next year and potential credit card fee renegotiation could significantly enhance shareholder returns. Bernstein raised Hyatt’s target price from $167 to $177, maintaining a 13.5x NTM+1 EBITDA multiple.

In recent developments, Hyatt Hotels Corporation reported second-quarter 2025 earnings that surpassed analyst expectations, with revenue reaching $1.75 billion and an earnings per share of $0.68.

Marriott (NASDAQ:MAR) ranks second with Bernstein particularly optimistic about its 2026 outlook. The brokerage notes Marriott isn’t truly underperforming Hilton on fee revenue growth but has faced temporary setbacks from one-off events this year.

Bernstein expects improvement in net unit growth (NUG) by 2026 through midscale expansion, upgraded technology, and recent loyalty program growth.

While cash conversion has lagged Hilton in 2025 due to earlier re-leveraging and investments, this trend is expected to reverse from 2026. Bernstein increased Marriott’s target price to $327 from $309.

Marriott International announced second-quarter 2025 financial results that exceeded forecasts, posting revenue of $6.74 billion.

The company also declared a quarterly dividend of 67 cents per share and expanded its share repurchase program by an additional 25 million shares.

Hilton (NYSE:HLT) takes third position with Bernstein emphasizing "follow the cash" as the key lesson. Hilton’s consistent cash generation and topline performance explain its strong 2024-2025 performance.

However, Bernstein cites relative valuation as a barrier to a more bullish stance, suggesting the premium isn’t fully justified by fundamental outperformance. The target price was raised to $288 from $261, reflecting a 17.8x NTM+1 EBITDA multiple.

Hilton Worldwide Holdings also reported stronger-than-expected second-quarter 2025 results, with revenue of $3.14 billion and an adjusted EPS of $2.20. Following the report, Truist Securities raised its price target on the company, citing an updated financial outlook.

IHG (NYSE:IHG) ranks fourth despite maintaining its 13-15% EPS growth target during a challenging year for its key markets (mainstream US and China).

This achievement relied heavily on point sales and a renegotiated credit card contract, while hotel fees grew just 1.6% in H1.

Bernstein maintains a Market-Perform rating, slightly decreasing the target price to $8,970 from $8,990.

Accor (OTC:ACCYY) rounds out the top five. Despite facing short-term currency headwinds that might reverse, Bernstein expects the group to deliver results in line with its plan for FY25 and maintains an Outperform rating.

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