On Tuesday, Mizuho Securities initiated coverage on shares of Hilton Worldwide Holdings Inc. (NYSE:HLT), giving the hotel chain a Buy rating and setting a price target of $245. The firm's positive stance is based on several key factors expected to drive the company's performance.
Mizuho's analysts highlight Hilton's above-average unit growth as a primary reason for the optimistic outlook. The hotel industry is currently facing a supply-constrained environment, and Hilton's ability to expand its number of units is seen as a significant advantage.
Another pillar of Mizuho's Buy thesis is the expected recovery in the Asia-Pacific region, particularly from increased travel from China. As travel restrictions ease and tourism begins to rebound, Hilton is poised to benefit from the resurgence in this market.
The third element supporting the Buy rating is the anticipated recovery in group and business transient bookings. Hilton has a larger exposure to this segment, which is expected to recover as corporate travel and events return to pre-pandemic levels.
Mizuho's analysis suggests that these factors will contribute to robust EBITDA growth for Hilton. The firm's estimates for Hilton's EBITDA in 2024 and 2025 are $3,405 million and $3,667 million, respectively. These projections are above the consensus estimates of $3,366 million for 2024 and $3,657 million for 2025.
The firm's price target of $245 reflects confidence in Hilton's growth trajectory and potential for increased profitability in the coming years. Hilton Worldwide's stock will be closely watched by investors as the company aims to capitalize on the outlined growth drivers.
InvestingPro Insights
As Mizuho Securities sheds a positive light on Hilton Worldwide Holdings Inc. (NYSE:HLT) with a Buy rating and a $245 price target, real-time data from InvestingPro complements this outlook with some compelling metrics. Hilton's market capitalization stands at a robust $52.98 billion, indicative of its significant presence in the hotel industry. A notable gross profit margin of 74.12% for the last twelve months as of Q1 2023 underscores the company's efficiency and ability to control costs effectively, aligning with Mizuho's analysis of Hilton's growth potential.
Investors should also consider Hilton's impressive return over the past year, with a 59.98% one-year price total return, reflecting strong market confidence in the company's performance and future prospects. This is further bolstered by a 16.04% price total return over the last three months, suggesting continued investor enthusiasm. For those looking for more detailed analysis, there are additional InvestingPro Tips that highlight Hilton's trading at a high earnings multiple and the stock's low price volatility, which may interest those seeking stability in their investments.
For investors intrigued by Hilton's potential and the insights provided by Mizuho Securities, the InvestingPro platform offers a deeper dive with more InvestingPro Tips available, including the company's moderate level of debt and its performance in revenue growth. To access these insights and more, readers can take advantage of a special offer using coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription. With 15 additional tips listed on InvestingPro, savvy investors can equip themselves with a comprehensive understanding of Hilton's financial landscape.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.