Bernstein analyst Richard Clarke has maintained their bullish stance on H stock, giving a Buy rating yesterday.
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Richard Clarke’s rating is based on Hyatt’s strategic decision to sell the entirety of Playa’s real estate portfolio for $2 billion, which is expected to close by the end of 2025. This transaction allows Hyatt to maintain management agreements for most of the properties, enhancing its market share in the all-inclusive segment across Mexico, the Dominican Republic, and Jamaica. By retaining $200 million in preferred equity, Hyatt effectively reduces the net purchase price of Playa to $555 million, leading to an anticipated EBITDA of $60-65 million by 2027, which represents a favorable multiple compared to current market valuations.
Additionally, the sale addresses investor concerns about the asset-heavy nature of the Playa acquisition and the associated debt, especially during uncertain times. The deal is seen as a positive move, enabling Hyatt to expand its presence in the LATAM/Caribbean region while securing an asset-light fee stream at a discount. Despite some concerns about capital allocation, this transaction is viewed as beneficial for shareholders, with further opportunities on the horizon such as property disposals and a new credit card deal, supporting the Outperform rating.
According to TipRanks, Clarke is a 3-star analyst with an average return of 2.9% and a 49.64% success rate. Clarke covers the Consumer Cyclical sector, focusing on stocks such as Airbnb, Hyatt Hotels, and Marriott International.
In another report released yesterday, Bank of America Securities also reiterated a Buy rating on the stock with a $150.00 price target.