In a report released yesterday, Shaun Kelley from Bank of America Securities reiterated a Buy rating on Hyatt Hotels (H – Research Report), with a price target of $150.00.
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Shaun Kelley has given his Buy rating due to a combination of factors surrounding Hyatt Hotels’ strategic moves and financial outlook. The recent agreement to sell Playa Hotels & Resorts’ real estate portfolio for $2 billion to Tortuga Resorts is a significant step in reducing risks associated with the acquisition. This transaction not only removes a key overhang but also secures an additional $60-65 million in asset-light fees, enhancing Hyatt’s financial stability and growth prospects.
Furthermore, Hyatt’s expectation to achieve $60-65 million of stabilized EBITDA by 2027 aligns with the higher end of projected earnings, making the acquisition of this asset-light fee stream a lucrative deal at approximately 9x EBITDA. This valuation is favorable compared to industry peers like Marriott and Hilton, which trade at higher multiples. Additionally, the potential $143 million earnout could further decrease the purchase price, adding to the attractiveness of the investment. These strategic initiatives and financial metrics underpin Kelley’s confidence in Hyatt’s future performance, justifying the Buy rating.
In another report released yesterday, Bernstein also maintained a Buy rating on the stock with a $167.00 price target.
Based on the recent corporate insider activity of 70 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of H in relation to earlier this year.