Hyatt Hotels is grinding through a 43-week consolidation base. This hotel stock is today's IBD 50 Stocks to Watch pick and a leader in a rising industry group.
Hyatt holds the fifth spot out of 12 stocks in the Leisure-Lodging industry group, according to IBD Stock Checkup. The group ranks 70th out of 197 IBD groups, moving up from 108th four weeks ago.
The hotel stock has found support at its 21-day exponential moving average, since rising above it in October. Hyatt's relative strength line hit a new high on the MarketSmith weekly chart, as indicated by the blue dot.
The stock has gained more than 23% this quarter, earning a respectable 89 Relative Strength Rating. This means it has outperformed 89% of the stocks in the IBD database.
The Chicago hotel chain has over 1,200 properties and all-inclusive resorts scattered across 72 countries.
It's highly popular with business travelers, offering an array of loyalty rewards program for its members. Benefits include free nights, discounted member rates, room upgrades and complimentary amenities that accommodate both business and retail consumers.
Hyatt added 20 new hotels in Q3 2022, in locations ranging from Cozumel, Mexico to Santorini, Greece. It recently announced a global expansion of its Independent Collection brands, in a business plan that stretches through 2025.
Hyatt Earnings Surge Post-Pandemic
The stock took a hit despite reporting better-than-expected third quarter earnings of 64 cents per share on Nov. 3. That marked a major decline from the $2.31 reported in the same quarter last year.
Even so, Hyatt is projected to post a $1.02 profit for 2022, after two years of losses. And this growth trend is expected to continue, with $2.58 per share projected for 2023.
CEO Mark Hoplamazian sounded optimistic on the earnings news release, noting "We reported total fee revenue that exceeded 2019 by 50%, raised our full year 2022 Net Rooms Growth outlook to approximately 6.5%, and expanded our pipeline to 114,000 rooms."
He acknowledges consumers are cutting back on spending, but added that folks "have chosen to spend money on travel, and they are going to continue to do that because it is an antidote to some of the stresses."
The executive also said that travelers are prioritizing experiences and connections with family during this holiday season. Hyatt stresses luxury amenities, on-site dining, 24-hour room service and concierge services as reasons to stay in a hotel versus a private home.
Third quarter occupancy rose to a systemwide 67.9%, from only 13.3% in the same quarter of 2021. Quarterly sales have grown steadily, with triple-digit gains in the last five out of six quarters. However, Q3 growth lagged, at 81%, the lowest of the period.
Room revenue is on track to hit 130% of 2019 levels for resort locations worldwide.
Hotel Stock Popular With Institutions
Mutual funds own 70% of the hotel stock, with a modest increase in share ownership in the last few quarters.
Morgan Stanley set a $136 price target on the stock last week, initiating Hyatt at overweight. And Rothschild's Redburn research group reiterated H stock as a buy for the firm at the same time.
