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Park Hotels & Resorts (PK)
NYSE:PK
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Park Hotels & Resorts
(NYSE:PK)
69Neutral
Positive Factors
Capital Allocation
Continued belief in the merits of PK’s capital allocation strategies with earnings upside from its renovated assets, the Royal Palm project, and additional ROI opportunities.
Project Opportunities
The solid performance at renovated assets and additional long-term opportunity at the Royal Palm project are positives.
Negative Factors
Expense Growth
PK's 2025 setup faces headwinds with elevated expense growth, moderating group pace, and lapping one-time benefits.
Labor Costs
Labor costs and renovation disruption present some near-term pressure.
Uncertainty and Guidance
PK withdrew 2024 guidance given the uncertainty around impacts to near-term demand.
Park Hotels & Resorts (PK) vs. S&P 500 (SPY)
Market Cap
$2.02B
Dividend Yield10%
Average Volume (3M)5.20M
Price to Earnings (P/E)9.9
Beta (1Y)1.18
Revenue Growth-3.67%
EPS Growth122.68%
CountryUS
Employees91
SectorReal Estate
Sector Strength77
IndustryREIT - Hotel & Motel
Share Statistics
EPS (TTM)1.02
Shares Outstanding201,864,180
10 Day Avg. Volume4,896,595
30 Day Avg. Volume5,196,692
Financial Highlights & Ratios
PEG Ratio0.08
Price to Book (P/B)N/A
Price to Sales (P/S)0.87
Price to Cash Flow (P/CF)7.10
P/FCF Ratio10.30
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$13.22Price Target Upside32.20% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering9
Park Hotels & Resorts Business Overview & Revenue Model
Company DescriptionPark Hotels & Resorts Inc. (PK) is a leading lodging real estate investment trust (REIT) focused on acquiring, owning, and operating high-quality hotels and resorts. Primarily concentrated in the United States, the company boasts a diverse portfolio of properties located in prime urban and resort markets. Park Hotels & Resorts aims to deliver long-term growth and value to its investors by optimizing its portfolio through strategic acquisitions, dispositions, and asset management initiatives.
How the Company Makes MoneyPark Hotels & Resorts generates revenue primarily through the ownership and operation of its hotel properties. The company earns money by leasing hotel rooms to guests, which forms the bulk of its income. Additionally, the company generates revenue from food and beverage sales, conference and event hosting, parking, and other guest services provided at its properties. Park Hotels & Resorts also benefits from its strategic partnerships with leading hotel brands that manage its properties, such as Hilton and Marriott, which help maintain high occupancy rates and premium pricing. Furthermore, the company focuses on enhancing property value through renovations and operational improvements, which can lead to increased revenue over time.
Park Hotels & Resorts Financial Statement Overview
Summary
Park Hotels & Resorts has shown significant recovery and growth post-pandemic, with notable improvements in revenue and profitability metrics. The balance sheet reflects reduced leverage and better financial stability, although further equity strengthening could enhance the company's financial standing. Cash flow management shows resilience and the ability to support growth and debt reduction. Overall, the company is on a positive trajectory but should continue efforts to enhance profitability and equity base.Income Statement
The company has shown strong recovery and revenue growth from pandemic lows, with a significant rebound in revenue from $852 million in 2020 to $2.6 billion in 2024. Gross profit margin has improved, reaching 100% in 2024, indicating effective cost management. However, net profit margin at 8.15% in 2024, while positive, shows room for improvement. EBIT margin at 15.04% and EBITDA margin at 12.15% demonstrate profitability but highlight the need for further enhancement in operating efficiency.70
Positive
Balance Sheet
The balance sheet reveals a reduction in total debt from $5.36 billion in 2020 to $225 million in 2024, enhancing financial stability. The debt-to-equity ratio significantly improved, indicating lower leverage. Return on Equity (ROE) has improved, showing better returns for shareholders. However, equity has decreased, affecting the equity ratio which stood at 39.79% in 2024, indicating moderate leverage with potential for strengthening equity position.65
Positive
Cash Flow
The company has demonstrated strong cash flow management with positive free cash flow of $429 million in 2024, a substantial improvement from negative figures in 2020. Operating cash flow to net income ratio is favorable, indicating efficient cash generation relative to net earnings. The free cash flow to net income ratio highlights robust cash conversion, supporting reinvestment and debt reduction efforts.75
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 2.60B | 2.70B | 2.50B | 1.36B | 852.00M | Gross Profit |
| 745.00M | 746.00M | 693.00M | 227.00M | -161.00M | EBIT |
| 391.00M | 343.00M | 413.00M | -178.00M | -1.20B | EBITDA |
| 696.00M | 683.00M | 573.00M | 89.00M | -939.00M | Net Income Common Stockholders |
| 212.00M | 97.00M | 162.00M | -452.00M | -1.44B |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 402.00M | 717.00M | 906.00M | 688.00M | 951.00M | Total Assets |
| 9.16B | 9.42B | 9.73B | 9.74B | 10.59B | Total Debt |
| 225.00M | 4.71B | 4.85B | 4.90B | 5.37B | Net Debt |
| -177.00M | 4.00B | 3.94B | 4.21B | 4.41B | Total Liabilities |
| 5.57B | 5.65B | 5.44B | 5.34B | 5.74B | Stockholders Equity |
| 3.65B | 3.81B | 4.34B | 4.45B | 4.89B |
| Cash Flow | Free Cash Flow | |||
| 429.00M | 218.00M | 241.00M | -191.00M | -524.00M | Operating Cash Flow |
| 429.00M | 503.00M | 409.00M | -137.00M | -438.00M | Investing Cash Flow |
| -166.00M | -217.00M | 87.00M | 394.00M | 119.00M | Financing Cash Flow |
| -573.00M | -475.00M | -320.00M | -475.00M | 914.00M |
Park Hotels & Resorts Technical Analysis
Neutral
10.00
Price Trends
10.98
Negative
12.31
Negative
12.86
Negative
Market Momentum
-0.32
Negative
46.40
Neutral
57.46
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PK, the sentiment is Neutral. The current price of 10 is above the 20-day moving average (MA) of 9.85, below the 50-day MA of 10.98, and below the 200-day MA of 12.86, indicating a neutral trend. The MACD of -0.32 indicates Negative momentum. The RSI at 46.40 is Neutral, neither overbought nor oversold. The STOCH value of 57.46 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for PK.
Park Hotels & Resorts Risk Analysis
Park Hotels & Resorts disclosed 32 risk factors in its most recent earnings report. Park Hotels & Resorts reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Park Hotels & Resorts Peers Comparison
Overall Rating
UnderperformOutperform
Sector (59)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
74 Outperform | $2.84B | 13.43 | 6.50% | 8.05% | 6.52% | 14.45% | |
72 Outperform | $9.62B | 14.07 | 10.53% | 5.76% | 7.02% | -4.78% | |
69 Neutral | $2.02B | 9.90 | 5.68% | 10.00% | -3.67% | 122.68% | |
64 Neutral | $1.66B | 58.83 | 2.01% | 4.47% | -8.18% | -85.42% | |
63 Neutral | $1.51B | 39.34 | 2.98% | 2.36% | 5.12% | -49.88% | |
61 Neutral | $1.07B | 25.39 | 2.94% | 7.91% | 3.31% | -15.16% | |
59 Neutral | $2.72B | 11.59 | 0.11% | 8770.69% | 5.44% | -16.52% |
* Real Estate Sector Average
Performance Comparison
PK
Park Hotels & Resorts
10.00
-5.05
-33.55%
DRH
Diamondrock
7.21
-1.51
-17.32%
SHO
Sunstone Hotel
8.24
-1.70
-17.10%
HST
Host Hotels & Resorts
13.88
-4.31
-23.69%
RLJ
RLJ Lodging
7.02
-3.44
-32.89%
APLE
Apple Hospitality REIT
11.89
-2.27
-16.03%
Park Hotels & Resorts Earnings Call Summary
Earnings Call Date: Feb 19, 2025 | % Change Since: -21.81% | Next Earnings Date: May 5, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted Park Hotels & Resorts' strategic asset dispositions and successful redevelopment projects leading to strong performance in certain markets. However, challenges such as labor strikes in Hawaii, RevPAR decline in Q4, and significant debt maturities present concerns. The sentiment is cautiously optimistic with a focus on long-term growth and strategic investments.Highlights
Strategic Asset Dispositions
In 2024, Park Hotels & Resorts strategically divested three hotels for a combined $200 million, improving RevPAR by $3 and EBITDA margin by over 30 basis points. The company plans to target $300 to $400 million in non-core asset sales in 2025 to further enhance portfolio quality and pay down debt.
Successful Redevelopments
The Bonnet Creek Resort in Orlando and Casa Marina Resort in Key West showed strong performance post-improvement. Bonnet Creek's RevPAR increased 17% and EBITDA exceeded $82 million, up 36% from the previous year. Casa Marina's RevPAR increased almost 29% since 2019, with EBITDA up 31% since 2019.
Positive Group Revenue Trends
Group revenue pace at the Bonnet Creek complex is up 15% for 2025, with expectations for continued growth due to new developments like Universal's $6 billion epic theme park opening.
Solid Operational Performance
Park Hotels ended Q4 with strong results, including a 30% RevPAR increase in Orlando and a 77% increase at Casa Marina. The Hilton Chicago saw nearly 15% growth in RevPAR and a 53 basis point improvement in EBITDA margin.
Royal Palm Resort Redevelopment
A $100 million investment is planned for the Royal Palm Resort in South Beach, expected to elevate its market positioning and potentially double its EBITDA post-renovation.
Lowlights
Hawaii Market Disruptions
The Hilton Hawaiian Village was negatively impacted by a 45-day labor strike and guest room renovations, resulting in a 540 basis point headwind to total portfolio RevPAR in Q4.
Q4 RevPAR Decline
Q4 RevPAR declined by 1.4%. Excluding strike impact, RevPAR increased by 3.1%, but the overall performance was below expectations.
Challenges in Miami
The Royal Palm renovation will result in a $17 million EBITDA displacement for 2025, and operations will be suspended into Q2 of 2026.
Debt Maturity Concerns
The $1.4 billion CMBS debt on Hawaiian Village and the Hyatt Regency Boston matures in the second half of 2026, posing a refinancing challenge.
Company Guidance
During the call, Park Hotels & Resorts Inc. provided guidance for 2025, indicating an anticipated RevPAR growth of 0% to 3%, reflecting challenges from the first quarter and planned closures. The company plans to aggressively pursue $300 to $400 million in non-core asset sales to enhance portfolio quality and reduce debt. Expected EBITDA margins for 2025 are forecasted between 20.1% and 27.7%, with anticipated adjusted EBITDA of $610 million to $670 million and adjusted FFO per share guidance of $1.90 to $2.20. Significant capital investments are planned, including a $100 million renovation of the Royal Palm Resort, anticipated to generate an IRR of 15% to 20% and potentially double the hotel's EBITDA. Group revenue pace at Bonnet Creek is up 15%, and the company expects RevPAR growth in the upper single digits with double-digit EBITDA growth at key resorts. The company remains focused on strategic capital recycling and operational excellence to unlock long-term value.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.