Nucor earnings beat by $0.08, revenue fell short of estimates
Investing.com -- Raymond James on Tuesday upgraded Hyatt Hotels Corp to Strong buy and lifted its price target to $165, saying a $2 billion deal to offload recently acquired Playa Hotels & Resorts real‑estate assets removes a “significant overhang” on the stock.
Hyatt shares were up about 5% Tuesday at $146 in trading.
RJ said the agreement to sell all 15 Playa resorts to Tortuga Resorts, a joint venture between KSL Capital Partners (WA:CPAP) and Mexico’s Rodina, came sooner than expected, covered the full portfolio and accelerates Hyatt’s target of raising $2 billion from asset sales by 2027.
The deal values the properties at roughly eight times forecast 2024 earnings before interest, tax, depreciation and amortisation and is due to close before year‑end 2025.
Raymond James wrote that the transaction “removes a significant overhang on the stock” and praised management’s execution despite macro‑economic uncertainty.
It called investors’ muted initial reaction “a bit of a head‑scratcher,” arguing progress on disposals was more important than the sale multiple.
The broker noted Hyatt now trades about 2.5 EBITDA turns below Marriott International (NASDAQ:MAR.O) and five turns below Hilton Worldwide (NYSE:HLT) even though more than 90% of Hyatt’s earnings are expected to come from fee‑based, asset‑light operations by 2027.
Hyatt has lagged Marriott by nine percentage points and Hilton by 19 points so far this year, it added.
Following the divestiture, Hyatt’s net purchase price for Playa’s management contracts falls to roughly $555 million, or about nine times projected 2026 EBITDA, with a potential $143 million earn‑out tied to performance.
The company will keep $200 million of preferred equity in the venture and retain 50‑year management agreements on 13 of the resorts, preserving fee income while lightening its balance sheet.
Hyatt bought Playa for $2.6 billion only two weeks ago to expand in the fast‑growing all‑inclusive segment. The swift flip of the bricks‑and‑mortar assets “underscores management’s commitment to an asset‑light strategy,” Raymond James said.