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With a market cap of $53.3 billion, Hilton Worldwide Holdings Inc. (HLT) is a leading global hospitality company. The McLean, Virginia-based company manages, franchises, owns, and leases properties across multiple regions, offering brands from luxury to economy segments.
Companies valued at $10 billion or more are generally labeled as “large-cap” stocks, and Hilton fits this criterion perfectly. Hilton is renowned for its vast global portfolio of 22 diverse hotel and resort brands, offering a unique franchise-based business model that spans luxury to economy segments across 118 countries.
Despite its strong market position, the hotel company has experienced a decline of 6.2% from its 52-week high of $229.03, reached in July. Shares of HLT have risen 6.3% over the past three months, outperforming the broader Nasdaq Composite's ($NASX) 1.5% loss over the same time frame.
Longer term, HLT is up 18% on a YTD basis, outpacing NASX's 12.5% gains. Moreover, shares of Hilton have gained 39.5% over the past 52 weeks, compared to NASX's 22.7% return over the same time frame.
Since last year, HLT has consistently traded above its 200-day moving average and has generally stayed above its 50-day moving average, despite recent fluctuations in the past few months.
Hilton has outperformed due to its asset-light franchising model and strong secular tailwinds from rising demand for branded hotels, particularly among younger demographics seeking experiential travel. Also, its rapidly growing loyalty program has increased RevPAR and direct bookings, driving long-term profitability.
However, despite beating the Q2 earnings estimate, Hilton's stock fell 1.7% on Aug. 7, primarily due to a lower-than-expected 2024 RevPAR growth forecast and weaker growth in the U.S. RevPAR, reflecting economic uncertainty and cautious consumer spending. But, the stock recovered marginally the following day as investors reacted positively to Hilton's raised full-year profit forecast, strong international RevPAR growth, and an expanded room development pipeline.
Its rival, Marriott International, Inc. (MAR), has gained 11.3% over the past 52 weeks and 1.4% on a YTD basis, underperforming HLT in both time frames.
Despite HLT’s outperformance relative to the broader market, analysts remain cautiously optimistic about its prospects. Among the 21 analysts covering the stock, there is a consensus rating of “Moderate Buy,” and the mean price target of $219.80 suggests a premium of only 2.3% to current levels.
On the date of publication, Sohini Mondal did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
