Hilton Stock Hits Record High After Q4 Revenue Beat; Target Price $178 in Best Case
Hilton, one of the largest and fastest-growing hospitality companies in the world, reported better-than-expected revenue in the fourth quarter, largely driven by higher vaccination rates and the relaxation of travel restrictions during the holiday season.
The company, which has more than 4,000 hotels, resorts and timeshare properties comprising more than 650,000 rooms in 90 countries and territories, said its net income attributable to shareholders of $147 million, or $0.52 per share. That swung from a net loss of $224 million, or $0.81 per share seen a year ago.
The McLean, Virginia-based reported quarterly adjusted earnings of $0.72 per share, missing the Wall Street consensus estimates of $0.74 per share. However, the company’s revenue more than doubled to $1.84 billion from a year earlier. That topped the market expectations of $1.82 billion.
The increase in travel during the holiday quarter as well as the easing of travel restrictions supported the revenue growth.
Hilton Worldwide stock hit an all-time high of $159. 98, rising nearly 1% on Wednesday. The stock rose nearly 1% so far this year after surging over 40 in 2021.
“The bottom-line beat comprised of mixed line-item results should draw a neutral reaction in the shares, pending Mgt. commentary on the call. The impacts to results appear largely COVID-driven rather than fundamental and should dissipate through 1H22, although the performance margin for higher-valuation stocks is narrower, in our view. Taken in total, the COVID recovery is well underway and HLT is firmly positioned within it,” noted David Katz, Equity Analyst at Jefferies.
Hilton Stock Price Forecast
Twelve analysts who offered stock ratings for Hilton in the last three months forecast the average price in 12 months of $149.64 with a high forecast of $178.00 and a low forecast of $126.00.
The average price target represents a -5.99% change from the last price of $159.18. Of those 12 analysts, three rated “Buy”, nine rated “Hold”, while none rated “Sell”, according to Tipranks.
Morgan Stanley gave the base target price of $135 with a high of $189 under a bull scenario and $96 under the worst-case scenario. The investment bank gave an “Equal-weight” rating on the hospitality company’s stock.
“We expect US industry RevPAR to take ~4 years to recover back to 2019 levels post COVID given our corporate travel surveys suggest structural headwinds. Strong mgmt team with a track record of creating value for owners,” noted Thomas Allen, equity analyst at Morgan Stanley.
“Attractive 2022e/2023e 5.0/5.5% net unit growth creates more predictable growth than more asset-heavy peers. However, the risk to 2022 EBITDA expectations given owned hotels is mostly internationally-based where the Covid recovery is lagging. We see a wide risk-reward that will depend on the strength of recovery from COVID-19.”
Several analysts have also updated their stock outlook. Wells Fargo cut the target price to $147 from $150. Berenberg raised the price objective to $140 from $110. Evercore ISI lifted the price target to $22 from $21.
Technical analysis suggests it is good to buy as 100-day Moving Average and 100-200-day MACD Oscillator shows a strong buying opportunity.
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