On Thursday, Truist Securities adjusted its price target for Hyatt Hotels (NYSE:H) Corporation shares (NYSE:H) to $168 from the previous target of $172, while maintaining a Buy rating on the stock. The revision follows the firm's updated earnings estimates for the hotel chain, with the 2024 expected Adjusted EBITDA now set at $1,189 million, down from $1,225 million, and the EPS forecast reduced to $3.68 from $5.40.
For the year 2025, the analyst projects a slight decrease in Adjusted EBITDA to $1,333 million from the earlier estimate of $1,334 million. Still, the EPS estimate for 2025 has been increased to $4.50 from the previous forecast of $4.43.
The new stock price target is based on a 15.0x blended sum-of-the-parts analysis on the company's 2025 segment multiples, which include 12.5x for owned EBITDA and 16x for fees EBITDA, with other segments and distribution valued at 10 to 12 times.
The firm's revised stock price target also factors in higher assumptions for Hyatt's net debt. Hyatt Hotels is currently trading at multiples of 16.1x and 13.1x the firm's 2024 and 2025 EBITDA estimates, respectively. The updates to the financial forecasts and price target reflect the latest available data and Truist Securities' assessment of the company's financial outlook.
InvestingPro Insights
Recent metrics from InvestingPro show a nuanced picture of Hyatt Hotels Corporation's (NYSE:H) financial health and market performance. The company boasts a robust gross profit margin of 67.12% over the last twelve months as of Q1 2024, indicating efficient cost management and a strong ability to generate profit from sales. Moreover, Hyatt has demonstrated an ability to maintain profitability, with a solid Return on Assets of 5.62% during the same period, which is a testament to the effective use of its assets to generate earnings.
InvestingPro Tips highlight that Hyatt's management has been actively engaging in share buybacks, which can be a sign of confidence in the company's future and often leads to an increase in share value. Furthermore, analysts predict that the company will remain profitable this year, which could reassure investors looking for steady performance in the current economic environment. For those interested in further insights, there are an additional 9 InvestingPro Tips available that could provide deeper analysis into Hyatt's performance and outlook.
Investors considering Hyatt's stock can also note that it has experienced a large price uptick of 26.32% over the last six months, reflecting positive market sentiment. While the company trades at a high Price / Book multiple of 4.0, suggesting a premium valuation, the recent price movements and solid fundamentals might justify this in the eyes of some investors. For a more comprehensive set of tools and tips, including a total of 12 InvestingPro Tips for Hyatt, potential investors can use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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