Jefferies maintains buy rating on Hilton stock amid economic uncertainty

Published 06/04/2025, 06:22 AM
Jefferies maintains buy rating on Hilton stock amid economic uncertainty

On Wednesday, Jefferies analysts reaffirmed a Buy rating for Hilton Worldwide stock, maintaining a price target of $296.00. The analysts expressed confidence in their forecasts and overall thesis, citing the company’s quality business model and management team as key strengths amid current economic uncertainties. According to InvestingPro data, Hilton maintains impressive gross profit margins of 76.51% and management has been actively buying back shares, demonstrating confidence in the company’s future.

The analysts noted that Hilton’s business model continues to show momentum, aligning with their slightly above-consensus estimates. With revenue growth of 5.19% and a strong financial health score of "GOOD" on InvestingPro, this momentum is expected to support sustained earnings growth across various economic conditions, which justifies premium valuation multiples within their coverage.

Hilton Worldwide’s current valuation is highlighted by Jefferies analysts as having premium multiples of 17 times EBITDA and 28 times price-to-earnings, compared to 22.6 times for the S&P 500. This assessment reflects the analysts’ confidence in Hilton’s ability to maintain its performance despite broader market challenges.

Jefferies remains optimistic about Hilton’s future prospects, emphasizing the company’s positioning as one of the best in terms of business model quality and management effectiveness.

In other recent news, Hilton Worldwide Holdings (NYSE:HLT) Inc. reported its Q1 2025 earnings, exceeding analysts’ expectations with an adjusted EPS of $1.72, compared to the forecasted $1.62. However, revenue slightly missed projections, coming in at $2.7 billion against an anticipated $2.73 billion. Despite the revenue shortfall, Hilton opened 186 hotels in the quarter, marking a 20% increase year-over-year, and maintained a strong development pipeline with over 503,000 rooms. Jefferies upgraded Hilton’s stock rating from Hold to Buy, raising the price target to $296, reflecting confidence in Hilton’s business model and growth prospects. Meanwhile, Raymond James adjusted its price target for Hilton to $275 from $290, retaining an Outperform rating, following the company’s earnings announcement. The firm noted that while Hilton’s revenue per available room (RevPAR) reached the lower end of its guidance, the group business segment showed resilience with a 6% increase in RevPAR. Hilton’s management has updated its full-year 2025 RevPAR growth forecast to range between 0-2%, alongside maintaining net unit growth expectations of 6-7%.

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