Breaking News
Get 40% Off 0
👀 Reveal Warren Buffett's stock picks that are beating the S&P 500 by +174.3% Get 40% Off

Hyatt Hotels the preferred hotel name at Wells Fargo due to favorable exposure

Published Dec 05, 2023 19:48
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters.
 
H
+2.77%
Add to/Remove from a Portfolio
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
MAR
+0.05%
Add to/Remove from a Portfolio
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
HLT
+0.24%
Add to/Remove from a Portfolio
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 

Wells Fargo initiated Hyatt Hotels (NYSE:H) at Overweight and Hilton (HLT) and Marriott (MAR) at Equal Weight in a note covering hotel stocks on Tuesday.

Analysts at Wells Fargo said they believe US lodging is entering a period of stabilization and they prefer names that cater to group and higher-end business/leisure travel, have strong unit growth outlooks, and carry reasonable valuations.

"We think US Lodging is entering a period of stabilization, following a robust, leisure led-recovery in 2021-22, a business travel recovery in 2023, and the 2H23 group/business recovery continuing into 2024," the analysts explained.

The firm said they like Hyatt, which was assigned a $138 price target due to its "favorable group, high-end leisure and APAC exposure, 6-7% NUG guide, and reasonable valuation."

Hilton was given a $168 price target, explaining that while there is a lot to like about the company, they "view the risk/reward as fairly even."

"HLT has an impressive, fee-based business model w/ multiple growth drivers (NUG, RevPAR, royalties, and ancillary credit cards/branding fees) and a well-respected mgmt team w/ a strong track record. Group business should be a tailwind in 2024 (pacing +18% y/y), it's been aggressively repurchasing its stock (authorization now $4.2b, ~10% of mkt cap), and its CMD (March 2024) is a catalyst. But at 15x 2024E EV/EBITDA, we think these positives are reflected in the stock," the analysts said.

Marriott is well-positioned for 2024 strength, but the valuation seems fair, according to Wells Fargo, who has a $220 price target on the stock.

"MAR is a high-quality, asset-light, capital-returning compounder that is attractively positioned to benefit from 2024 lodging tailwinds, including group strength, high-end leisure demand, and APAC/China recovery," they explained. "We also like MAR for its non-RevPAR-related fee growth (pacing at a 10% CAGR, primarily driven by credit card fees, with ~$600m in FY23E) and ample share repurchases. However, at 15x 2024E EV/EBITDA, we believe most of these positives are reflected in the stock."

Hyatt Hotels the preferred hotel name at Wells Fargo due to favorable exposure
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email