Checking Into Xenia Hotels & Resorts, Inc. Known as XHR, this company is experiencing a reawakening in lodging demand following turbulent years amidst the pandemic. Surging ahead with a Zacks Rank #1 (Strong Buy), XHR is projected to show earnings growth in 2024.
Xenia Hotels & Resorts is a Real Estate Investment Trust (REIT) specializing in luxury and upper upscale hotels and resorts. It boasts 32 hotels with 9,514 rooms spread across 14 states. These iconic establishments are managed or licensed by renowned hospitality giants like Marriott, Hyatt, Kimpton, Fairmont, Loews, Hilton, The Kessler Collection, and Davidson.
A Victory Lap in the Fourth Quarter of 2023
On February 27, 2024, Xenia released its fourth-quarter 2023 results, surpassing the Zacks Consensus by $0.04, reporting earnings of $0.41 compared to the expected $0.37. Although same-property RevPAR dipped 3.4% year-over-year to $157.69, excluding the undergoing $110 million renovation at the Hyatt Regency Scottsdale Resort & Spa at Gainey Ranch, the RevPAR would have increased to $162.51, up by 1.2% from the same period in 2022.
CEO Marcel Verbaas remarked, “Reflecting on 2023, our overall performance thrived due to consistent asset management initiatives as lodging demand normalized across our markets.”
Highlighting meticulous expense management amidst cost pressures, Mr. Verbaas noted the completion of crucial capital projects such as renovations at various Kimpton and Grand Bohemian hotels.
Excitement for 2024
Xenia’s optimism for 2024 is in sync with analysts’ sentiments. The company is anticipating a rebound in business transient and group demand over the coming months. Furthermore, the transformation of Hyatt Regency Scottsdale into a Grand Hyatt luxury resort is expected to yield additional benefits in the latter part of the year.
Xenia revealed that quarter-to-date same-property RevPAR, excluding the Hyatt Regency Scottsdale, rose by approximately 4.9% through February 22, 2024, compared to the same period the previous year.
Analysts have revised earnings estimates upwards for both 2024 and 2025. With the Zacks Consensus Estimate for 2024 climbing to $1.68 from $1.59, reflecting a 9.1% earnings growth compared to the prior year.
Golden Opportunities and Green Pastures
Xenia’s shares saw a 9.5% uptick since the previous earnings report, with a favorable forward Price/Earnings ratio of 8.8, indicating they are still undervalued.
The company also offers a dividend, with a 20% increase in the quarterly cash dividend for the first quarter to $0.12 per share. The dividend, boasting a 3.2% yield, is scheduled to be paid on April 15, 2024.
For income-seeking investors desiring a stake in the hospitality sector, Xenia should be at the top of your watchlist.
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