Analysts at Macquarie Equity Research view Hilton's (HLT) stock favorably, describing it as the most stable and resilient hotel operator against a recession.
However, the firm maintained a Neutral rating and $192 price target on the name in a note Wednesday, saying they think there could be some slight underperformance given the company's segments.
"Hilton has come a long way since its IPO in 2013, having delivered 5.7% net unit growth (NUG) CAGR while also growing fees per room by 20% and returning over $9bn to shareholders, highlighting the powerful asset-light, fee-based business model," wrote Macquarie.
HLT was said to have painted a compelling picture of its diversified and asset-light drivers of growth, powering the company's impressive capital returns profile at its recent Investor Day.
"Investors are rewarding large-cap consistent growers and HLT has been a beneficiary of this," added Macquarie. "We believe investors will continue to view positively the consistent fee growth, 6-7% NUG outlook and capital returns story, but we await a better entry point with shares +14% YTD, in line with lodging peers and vs. +8% S&P500, and trading at 17.5x' 25E cons EV/ EBITDA, ~0.5x turn above the 5-year average."
The firm also cited HLT's less exposure to the luxury and upper-upscale chain scales as a reason for the Neutral rating.