Hyatt Hotels Post Deeper Loss in Q1, Shares Fall

Hyatt Hotels Corporation, a leading global hospitality company, reported a bigger-than-expected loss for the fifth consecutive time in the first quarter of this year, reflecting the impact of the COVID-19 pandemic and worldwide travel restrictions.

The U.S. hotel operator said its net loss attributable was $304 million, or $2.99 per diluted share, in the quarter ended March 31, 2021, compared to a net loss attributable to Hyatt of $103 million, or $1.02 per diluted share, in the first quarter of 2020.

Adjusted net loss attributable was $363 million, or $3.57 per diluted share, in the first quarter of 2021, compared to Adjusted net loss attributable to Hyatt of $35 million, or $0.35 per diluted share, in the first quarter of 2020. That was worse than Wall Street’s consensus estimates of -$1.33 per share.

The Chicago-based company said its comparable owned and leased hotels RevPAR decreased 64.4% compared to the first quarter of 2020.

Following the disappointing results, Hyatt shares fell 1.56% to $80.68 on Tuesday. The stock rose over 8% so far this year.

Analyst Comments

“Expect a positive reaction to Hyatt’s (H) 1Q21 beat. Rising trends in the United States and the greater China region, which drove outperformance, are likely to accelerate through 2022 while Europe has been a laggard on vaccine distribution. What remains is an acceleration in urban, business transient and group business, which could provide another phase of the recovery,” noted David Katz, equity analyst at Jefferies.

Hyatt Stock Price Forecast

Eleven analysts who offered stock ratings for Hyatt in the last three months forecast the average price in 12 months of $60.00 with a high forecast of $71.00 and a low forecast of $52.00.

The average price target represents a 7.50% increase from the last price of $55.82. Of those 11 analysts, eight rated “Buy”, three rated “Hold” while none rated “Sell”, according to Tipranks.

Morgan Stanley gave the base target price of $61 with a high of $107 under a bull scenario and $31 under the worst-case scenario. The firm gave an “Equal-weight” rating on the hospitality company’s stock.

“Higher owned exposure suggests risk given the spread of COVID-19 and greater operating leverage. However, Hyatt has lower financial leverage than peers. Higher exposure to increasing new supply and alternative accommodations given more gateway city exposure than peers (e.g., 8% NYC exposure vs. MAR 4% and HLT 3%) puts RevPAR growth at risk,” noted Thomas Allen, equity analyst at Morgan Stanley.

“Potential ability to monetize assets at attractive multiples could create value. Limited float / large insider ownership means constant discount, despite attractive M+F business.”

Several other analysts have also updated their stock outlook. BofA Global Research raised the price objective to $85 from $80. Evercore ISI lifted the target price to $95 from $90. Citigroup increased the price target to $90 from $80. Baird upped the target price to $72 from $63. Jefferies raised the target price to $85 from $75.

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