Hilton Worldwide Holdings: Financial Performance and Market Outlook
McLean, Virginia-based Hilton Worldwide Holdings Inc. (HLT) stands as one of the largest hospitality companies globally. The company is involved in various aspects of the hotel and resort industry, including owning, leasing, managing, developing, and franchising properties. With a market capitalization of $59.5 billion, Hilton operates through distinct Management and Franchise and Ownership segments.
Defined as “large-cap stocks,” companies with market values of $10 billion or more include Hilton, which perfectly fits this classification. The company boasts a portfolio of over 8,400 properties across 140 countries and territories. Considering Hilton’s expansive reach, its valuation exceeding this threshold is not surprising.
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On February 13, HLT reached its all-time high of $275.22 but is currently trading 13.2% below that peak. While the stock has experienced a 5.8% decline over the past three months, it has significantly outperformed the Consumer Discretionary Select Sector SPDR Fund (XLY), which saw a 14.7% decrease during the same period.
Looking at a longer timeframe, Hilton’s performance stands out. Over the past six months, HLT shares have increased by 13.4%, and over the past 52 weeks, they have risen by 16.1%. In comparison, the XLY gained just 6% in the last six months and 10% over the past year.
To confirm the overall bullish trend despite recent fluctuations, it is noteworthy that HLT has traded above its 200-day moving average for much of the past year, although it did slip below its 50-day moving average in March.
After releasing strong Q4 results on February 6, Hilton’s stock jumped 4.9%. The company achieved a 6.7% year-over-year increase in overall revenues, totaling $2.8 billion, surpassing analysts’ expectations by 1.3%. This growth was driven by increased revenues from managed and franchised properties. Hilton also demonstrated significant expense management, leading to a 22.3% year-over-year rise in operating income to $489 million, with its adjusted earnings per share (EPS) of $1.76 exceeding consensus estimates considerably.
Looking ahead, Hilton anticipates a revenue per available room increase of 2% to 3% for fiscal 2025. Additionally, it expects its adjusted EPS to fall between $7.71 and $7.82, reflecting a midpoint year-over-year growth of 9.1%.
In comparison with its major competitor, Marriott International, Inc. (MAR), Hilton maintains a lead in stock performance, with Marriott recording only a 2.8% increase over the past year.
Currently, among the 23 analysts covering HLT, the consensus rating is a “Moderate Buy.” The average price target stands at $265.61, indicating an 11.2% upside potential based on current price levels.
On the date of publication, Aditya Sarawgi did not hold (either directly or indirectly) positions in any of the securities mentioned in this article. All data and information are meant solely for informational purposes. To read more, view the Barchart Disclosure Policy here.
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The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.
