On Monday, BMO Capital Markets initiated coverage on Ryman Hospitality Properties (NYSE:RHP) stock with an optimistic outlook. The firm assigned an Outperform rating to the company, coupled with a price target of $133.00. The stock, which has delivered an impressive 19.2% return over the past six months according to InvestingPro data, currently trades near its 52-week high of $122.91.
The analyst at BMO Capital highlighted the distinct advantages of Ryman's group-oriented portfolio, which provides clear visibility and the ability to generate substantial ancillary revenue. This strategy has positioned Ryman to achieve industry-leading earnings before interest, taxes, depreciation, and amortization (EBITDA) per available room key.
With a market capitalization of $7 billion and strong financial health metrics according to InvestingPro's comprehensive analysis, the company has demonstrated robust execution of its business model.
Ryman's financial performance is expected to surpass that of its competitors, with projected accelerated growth in 2026 and 2027. This growth is anticipated to be driven by property renovations and an increase in group bookings, estimated at 12% and 10% respectively.
The potential future monetization of Ryman's subsidiary, Ole Red Entertainment Group (OEG), is seen as a significant event that could further enhance shareholder value. The analyst believes that this strategic move will act as a positive catalyst for the company.
Despite the general market appreciation for Ryman's business model and performance, BMO Capital sees further potential for stock price appreciation. The $133 price target is based on a 14-times multiple of Ryman's projected 2025 enterprise value to EBITDA, suggesting a total return of 16%.
Currently trading at an EV/EBITDA multiple of 14.09, InvestingPro's Fair Value analysis suggests the stock is fairly valued, with additional metrics and insights available in the Pro Research Report, part of InvestingPro's coverage of over 1,400 US equities.
In other recent news, Ryman Hospitality Properties reported record consolidated total revenue of $550 million in the third quarter of 2024, marking a 4.1% increase year-over-year. The company's adjusted EBITDAre also rose to $175 million, up 2.3% from the previous year, primarily due to strong performance in both the hospitality and entertainment segments.
Amid these developments, Ryman Hospitality revised its 2024 guidance, adjusting RevPAR growth and EBITDAre ranges due to market softness and construction disruptions.
Truist Securities increased its price target on shares of Ryman Hospitality Properties to $136.00, up from the previous target of $130.00, maintaining a Buy rating on the stock. This follows recent investor meetings led by Truist Securities, focusing on the company's future bookings and the absence of recent labor or weather-related setbacks.
In addition to these financial updates, Ryman Hospitality is exploring a potential expansion at the Gaylord Rockies, targeting 450 additional rooms. These are recent developments, reflecting the company's robust prospects for the upcoming years. As always, it is advisable to follow the company's announcements and analyst notes for the most accurate and up-to-date information.
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