Hyatt Hotels stock has some work to do if it wants to catch the Santa Claus rally, but a strong earnings outlook could rescue this IBD 50 stock's uptrend.
Chicago-based Hyatt operates or franchises a chain of more than 1,000 properties with nearly 300,000 rooms in 70 countries.
The hotel stock staged a strong rally after arresting a steep dive to a low of 77.70 on Sept. 23, regaining its 50-day and 200-day moving averages along the way.
The uptick reversed at 103.50 on Dec. 13, which was 4% below the 52-week high at 108.10 posted in February. That peak and the June low at 70.12 set boundaries for Hyatt stock's consolidation this year.
Hyatt Hotels Stock
Hyatt stock has now fallen for six straight days from its recent high, the longest losing streak in more than a year. The decline puts the rally in danger because its reached the 50-day line, where it's testing critical support.
The relative strength line, which measures performance against the S&P 500, has taken a recent turn for the worse. After trending steadily higher from a June low, the RS line has rolled over and is in danger of breaking the uptrend.
Watch to see if Hyatt can find support at its 50-day line and get its RS line pointed north again.
Even so, the stock remains in good technical shape for now, with an 88 Relative Strength Rating. This means it's outperformed 88% of all other stocks in the market in the past 12 months.
Strong Earnings Outlook
Hyatt's Earnings Per Share Rating is a less-than-sparkling 34. This is dragging on the broad-based Composite Rating, which is a lowly 69.
But sales and profits have been ramping up in 2022, as the hotel business recovers from the devastation of the Covid pandemic. In fact, analysts now see earnings in the current quarter rising a healthy 112% amid upward revisions.
For the full year, forecasts call for a profit of $1.06 per share vs. a $5.24 loss in 2021. And Wall Street now expects an outstanding 142% growth spurt in 2023, to $2.56 per share.
Hyatt ranks No. 5 in the Leisure-Lodging group, according to IBD's Stock Checkup.
Other stocks in the group include top-ranked Target Hospitality, No. 2 China-based Atour Lifestyle, Marriott International and U.K.-based InterContinental Hotels.
Target Hospitality is just beyond buy range after breaking out of a cup-with-handle base on Nov. 23. Atour just popped above the 5% buy zone as well, after breaking out of an IPO base.
