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Park Hotels & Resorts (PK)
NYSE:PK

Park Hotels & Resorts (PK) AI Stock Analysis

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PK

Park Hotels & Resorts

(NYSE:PK)

Rating:69Neutral
Price Target:
$11.50
â–²(12.41%Upside)
Park Hotels & Resorts' strong financial recovery and attractive valuation are key strengths, supported by strategic capital improvements and a robust dividend yield. However, mixed technical signals and challenges in RevPAR guidance due to macroeconomic uncertainty and specific market declines weigh on the overall score.
Positive Factors
Asset Disposition Strategy
PK sold the Hyatt Centric Fisherman's Wharf San Francisco for $80M at 64.0x EBITDA, showing progress on their $350M disposition program.
Renovation and Asset Performance
The solid performance at renovated assets, additional long-term opportunity at the Royal Palm project, and commitment in non-core asset sale are positives.
Share Price Potential
Expected share price return is 27.5%, suggesting a significant potential upside.
Negative Factors
Financial Forecasts
FY 2025E decreases to $1.93 from $2.03, showing reduced financial forecasts for the year.
Labor Costs and Margin Impact
The lower price target and multiples reflect the direct margin impact from labor activities, which are expected to linger.
Macro Uncertainty
PK lowered 2025 guidance for the more uncertain macro.

Park Hotels & Resorts (PK) vs. SPDR S&P 500 ETF (SPY)

Park Hotels & Resorts Business Overview & Revenue Model

Company DescriptionPark Hotels & Resorts Inc. (PK) is a leading lodging real estate investment trust (REIT) focused on owning and managing a diverse portfolio of hotel properties primarily located in prime U.S. destinations. The company's portfolio consists of high-quality assets in the luxury and upper-upscale segments, primarily operating under well-recognized brands affiliated with Hilton Worldwide Holdings, Inc. Park Hotels & Resorts strives to deliver exceptional hospitality experiences to its guests while maximizing value for its stakeholders.
How the Company Makes MoneyPark Hotels & Resorts generates revenue primarily through the ownership and operation of hotel properties. The company earns income from room rentals, food and beverage sales, and other services provided within its hotels. Its key revenue streams include room revenues, which account for the majority of its income, followed by food and beverage sales. Additionally, Park Hotels & Resorts benefits from affiliations with major hotel brands, such as Hilton, which drive customer loyalty and brand recognition. These partnerships often involve franchise or management agreements, providing a structured revenue-sharing model. The company's strategic focus on upscale and luxury segments in prime locations allows it to capitalize on high demand and premium pricing, further enhancing its revenue potential. Park Hotels & Resorts also seeks opportunities to optimize its asset portfolio through renovations, dispositions, and strategic acquisitions, contributing to its financial growth.

Park Hotels & Resorts Earnings Call Summary

Earnings Call Date:May 05, 2025
(Q1-2025)
|
% Change Since: 2.10%|
Next Earnings Date:Jul 31, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted strong performances in specific markets like Orlando and Key West and detailed significant capital allocation efforts to enhance the portfolio. However, challenges such as the RevPAR decline at the Hilton Hawaiian Village and overall guidance adjustments due to macroeconomic uncertainty weigh down the positive aspects.
Q1-2025 Updates
Positive Updates
RevPAR Growth in Key Markets
Bonnet Creek complex in Orlando and Casa Marina resort in Key West reported RevPAR increases of 14% and 12%, respectively, in the first quarter.
Capital Allocation and Renovation Plans
Executed over $80 million in capital improvements, with plans for $310 million to $330 million in total capital improvements for 2025. Upcoming $100 million renovation of Royal Palm South Beach, Miami is expected to double the hotel's EBITDA.
Share Repurchase Program
Repurchased approximately 3.5 million shares for a total of $45 million during the quarter, and about 11.5 million shares over the past year.
Hilton Hawaiian Village Project Milestone
Achieved a major milestone in entitlements for a planned 515-room tower, with City Council approval and expected final administrative approval by year-end.
Strong Group Booking Trends
Group revenue pace in Orlando hotels is up 9%, with an 18% increase in Q4 group revenue pace expected for the portfolio.
Negative Updates
RevPAR Decline at Hilton Hawaiian Village
RevPAR across Hawaii properties declined by 15% due to recovery challenges from last year's labor strike and softer inbound travel.
Overall RevPAR Guidance Adjustment
Lowered full-year RevPAR growth forecast by 100 basis points to a range of negative 1% to positive 2% due to slower-than-expected recovery at Hilton Hawaiian Village and macroeconomic uncertainty.
Transaction Market Challenges
Challenging transaction market impacting strategic initiative to sell $300 million to $400 million of non-core hotels.
Occupancy Decline
Occupancy fell by 210 basis points during the quarter, contributing to a modest 70 basis point decline in RevPAR compared to the prior year.
Company Guidance
During the Park, Hotels and Resorts Q1 2025 earnings call, guidance for the year was provided, emphasizing several key financial metrics and strategic initiatives. The company reported that first-quarter RevPAR remained stable with an 8% growth compared to Q1 2023, despite a challenging comparison due to last year's strong performance. The Bonnet Creek complex in Orlando and Casa Marina resort in Key West led the portfolio with RevPAR increases of 14% and 12%, respectively. The company announced plans for over $80 million in capital improvements for the quarter and an anticipated $310 to $330 million investment in 2025, highlighting a $100 million renovation at the Royal Palm South Beach, Miami, expected to yield a 15% to 20% return and double the hotel's EBITDA. The company also achieved a milestone in the entitlements process for a planned 515-room tower at Hilton Hawaiian Village. Despite a challenging market, Park is actively pursuing the sale of $300 to $400 million in non-core hotels and has repurchased approximately 11.5 million shares over the past year. Adjusted EBITDA guidance was revised to $590 to $650 million, and adjusted FFO per share was set at $1.79 to $2.09, reflecting a modest slowdown in demand.

Park Hotels & Resorts Financial Statement Overview

Summary
Park Hotels & Resorts shows a robust recovery trajectory post-COVID with improving profitability and cash flow metrics. The income statement shows moderate profitability, and the balance sheet reflects strength with improved leverage ratios. Positive cash flow metrics highlight efficient cash management, though historical high leverage remains a concern.
Income Statement
68
Positive
The company has shown revenue recovery post-pandemic, with TTM revenue at $2.59 billion but a slight decline from the previous year. The gross profit margin for TTM is healthy at 41.0%, and the net profit margin is 4.9%, indicating modest profitability. EBIT and EBITDA margins for TTM are 11.5% and 17.5% respectively, reflecting operational efficiency improvements over time.
Balance Sheet
70
Positive
The balance sheet shows a stable position with stockholders’ equity of $3.49 billion contrasting with total liabilities of $5.47 billion. The debt-to-equity ratio has improved to 0.06 in TTM, showcasing reduced leverage. The equity ratio is a solid 39.2%, indicating a strong footing relative to assets. However, historical high debt levels remain a potential risk.
Cash Flow
72
Positive
Improved cash flow management is evident with a TTM operating cash flow of $423 million and a free cash flow of $263 million, notably higher than previous years. The free cash flow growth rate is strong, indicating effective capital expenditure management. The operating cash flow to net income ratio is favorable at 3.33, reflecting effective cash conversion.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue2.59B2.60B2.70B2.50B1.36B852.00M
Gross Profit1.06B745.00M746.00M693.00M227.00M-161.00M
EBITDA453.00M594.00M683.00M573.00M89.00M-939.00M
Net Income127.00M212.00M97.00M162.00M-452.00M-1.44B
Balance Sheet
Total Assets8.90B9.16B9.42B9.73B9.74B10.59B
Cash, Cash Equivalents and Short-Term Investments233.00M402.00M717.00M906.00M688.00M951.00M
Total Debt222.00M4.79B4.71B4.85B4.90B5.37B
Total Liabilities5.46B5.57B5.65B5.44B5.34B5.74B
Stockholders Equity3.49B3.65B3.81B4.34B4.45B4.89B
Cash Flow
Free Cash Flow263.00M202.00M218.00M241.00M-191.00M-524.00M
Operating Cash Flow423.00M429.00M503.00M409.00M-137.00M-438.00M
Investing Cash Flow-173.00M-166.00M-217.00M87.00M394.00M119.00M
Financing Cash Flow-400.00M-573.00M-475.00M-320.00M-475.00M914.00M

Park Hotels & Resorts Technical Analysis

Technical Analysis Sentiment
Positive
Last Price10.23
Price Trends
50DMA
10.06
Positive
100DMA
10.55
Negative
200DMA
11.91
Negative
Market Momentum
MACD
0.02
Negative
RSI
53.30
Neutral
STOCH
47.77
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PK, the sentiment is Positive. The current price of 10.23 is above the 20-day moving average (MA) of 10.05, above the 50-day MA of 10.06, and below the 200-day MA of 11.91, indicating a neutral trend. The MACD of 0.02 indicates Negative momentum. The RSI at 53.30 is Neutral, neither overbought nor oversold. The STOCH value of 47.77 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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 2 New Risks
1.
Future issuances of debt securities, which would rank senior to our common stock upon our liquidation, and future issuances of equity securities, which would dilute the holdings of our existing common stockholders and may be senior to our common stock for the purposes of making distributions, periodically or upon liquidation, may negatively affect the market price of our common stock. Q4, 2024
2.
Changes to the U.S. federal income tax laws, including the enactment of certain tax reform measures, could have a material and adverse effect on us. Q4, 2024

Park Hotels & Resorts Peers Comparison

Overall Rating
UnderperformOutperform
Sector (53)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
HSHST
71
Outperform
$10.93B16.3410.12%5.08%7.52%-5.25%
71
Outperform
$2.82B14.925.84%8.11%4.98%-7.08%
PKPK
69
Neutral
$2.10B17.753.46%9.50%-3.68%35.35%
DRDRH
66
Neutral
$1.61B39.433.22%4.11%3.73%-44.49%
RLRLJ
64
Neutral
$1.14B28.722.92%8.00%2.82%-8.08%
SHSHO
61
Neutral
$1.77B92.241.66%4.04%-3.90%-89.21%
53
Neutral
$1.19B3.26-0.13%7.36%-1.64%-127.49%
* Real Estate Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
PK
Park Hotels & Resorts
10.23
-2.97
-22.50%
DRH
Diamondrock
7.66
-0.19
-2.42%
SHO
Sunstone Hotel
8.68
-1.07
-10.97%
HST
Host Hotels & Resorts
15.36
-1.34
-8.02%
RLJ
RLJ Lodging
7.28
-1.51
-17.18%
APLE
Apple Hospitality REIT
11.67
-1.62
-12.19%

Park Hotels & Resorts Corporate Events

Business Operations and StrategyFinancial Disclosures
Park Hotels Updates 2025 Outlook After Hotel Sale
Neutral
Jun 2, 2025

On June 2, 2025, Park Hotels & Resorts released an updated investor presentation reflecting recent operational statistics and a minor adjustment to its full-year 2025 outlook following the sale of the Hyatt Centric Fisherman’s Wharf hotel in May 2025. The company reported solid performance trends in its core markets, despite challenges such as economic uncertainty and renovation disruptions, and highlighted its ongoing efforts to enhance operational efficiencies and shareholder returns.

The most recent analyst rating on (PK) stock is a Hold with a $17.00 price target. To see the full list of analyst forecasts on Park Hotels & Resorts stock, see the PK Stock Forecast page.

Executive/Board ChangesShareholder Meetings
Park Hotels & Resorts Annual Meeting Outcomes
Neutral
Apr 28, 2025

On April 25, 2025, Park Hotels & Resorts held its Annual Meeting where stockholders voted on several proposals. The election of nine directors was confirmed, with each director set to serve until the 2026 meeting. Additionally, stockholders approved the amended 2017 Stock Plan for Non-Employee Directors and ratified the appointment of Ernst & Young LLP as the independent accounting firm for the fiscal year ending December 31, 2025. The compensation for named executive officers was also approved on a non-binding basis.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

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.Date of analysis: Jun 27, 2025