Daniel Politzer, an analyst from J.P. Morgan, has initiated a new Buy rating on Hyatt Hotels (H).
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Daniel Politzer has given his Buy rating due to a combination of factors that suggest strong future potential for Hyatt Hotels. One key reason is the anticipated narrowing of Hyatt’s valuation discount compared to its larger-cap peers. As Hyatt transitions to a more asset-light business model by 2027, it is expected to enhance free cash flow conversion, which should positively impact its valuation. Additionally, Hyatt’s industry-leading net unit growth, projected at 6-7%, positions it favorably among competitors, with potential for even higher growth in the coming years.
Furthermore, Hyatt’s strategic focus on organic growth over mergers and acquisitions is seen as a positive move, reducing management distractions and potential shareholder concerns. The company’s significant exposure to high-end leisure and international markets, where revenue per available room (RevPAR) growth is expected to outperform the U.S., adds to its attractiveness. With a price target set at $178, reflecting an upside potential of approximately 15%, Politzer believes Hyatt offers substantial growth opportunities over the next three to five years.
In another report released on November 12, Bernstein also maintained a Buy rating on the stock with a $177.00 price target.