While U.S. capital markets have been lifted recently by a wide-ranging technology-lead bull run, leisure, travel, and other cyclical stocks have lagged. While they have recovered, they did not experience as sharp a v-shaped recovery as tech stocks did.
Hotel stocks in particular have had a difficult time getting back to healthy business performances, as repeated lockdowns and restrictions on travel have deterred business and leisure travelers alike from moving about the world. This is not to say, however, they haven’t recovered at all over the last few quarters. Many analysts were anticipating a resurgence of summer 2021 traffic to hotels from pent-up demand, although this does not appear to have translated into share price gains.
Many hotel stocks move somewhat in tandem with one another, as stocks in other industries do. The trick is to find the one which can outperform the rest of the pack. In order to gain an edge, every piece of stock intelligence must be leveraged to its fullest. TipRanks’ Website Traffic tool can be utilized to gather insight into which stocks have seen gains in visits to their online sites. The financial aggregation company has partnered with SEMrush (SEMR) to make available alternative data sets for the curious investor.
Certainly, not all hotel bookings are made through their respective websites. Despite this, many bookings are made directly with the hotel, or at least individuals who have booked will visit the official site for further inquiries. Website traffic can be an indicative signal of which direction a hotel’s stock will be trending. Let’s take a look at the current data, and combine it with it opinions from financial analysts.
Hilton Worldwide
The legendary hotel chain has seen its share price remain in a fairly steady price channel after a sharp uptick in valuation from January to February 2021. These months included with them broad investor excitement about an economic and travel related reopening, and thus most stocks in the sector benefitted.
Unfortunately for Hilton (HLT), fears from the spreading Delta variant of COVID-19 have kept borders closed and individuals on their guard. Instead of a continued rebound, the stock traded sideways for the majority of the typically lucrative summer months, and has only recently seen a slight breakout from its previous pattern.
By inspecting hilton.com’s traffic data on TipRanks, an upward quarter-over-quarter trend can be identified. From Q2 to Q3, total visits from all devices increased 6.92%, while the share price gained 9.53%. Looking at longer-term ranges, visits are up 31.32% from the year-to-date period of 2020 compared to the same months of 2021. This positive statistic signals a steady recovery from the investor fears of last year.
Analysts have been taking the recent share price gains into account, and David Katz of Jefferies Group has weighed in. In his report, Katz believes that “the accelerating net unit growth, cash flows and capital returns can grow into what appears to be a high valuation.” The analyst sees a clear path to recovery for HLT, and remained confident in a “long-term value opportunity.”
Katz bullishly rated the stock a Buy, and assigned a price target of $169. This raised target from $159 now represents a possible 12-month upside of 17.32%.
On TipRanks, the average Hilton Worldwide price target is $145.45, suggesting a potential 12-month upside of 0.45%. Additionally, the HLT analyst rating consensus is Moderate Buy, based on 5 Buy and 6 Hold ratings.
Marriott International
The largest hotel and lodging brand in the world by number of rooms has undergone a similar saga, although it appears to have benefitted more over the last two months, as cyclical travel picked up. Marriott International (MAR) also received about a 30% boost from January to February of 2021, then cooled off for the vast majority of the summer. The stock has gained about 20% over the last two months.
The large hospitality player has recently been inking deals globally, including with hotels in Saudi Arabia and Brazil. Meanwhile, business traveler trends remain quiet, albeit growing incrementally. Some investors are banking on a large uptick in leisure bookings throughout the coming holiday and vacation season.
The website traffic data on TipRanks shows a positive direction prior to the company’s expected earnings release on November 3. Growth can be seen for both total device visits to marriott.com and the share price over Q3. Quarter-over-quarter, total device visits gained 4.49%, while the share price rose 8.47%. Speaking on the difference in the year-to-date periods of 2020 and 2021, visits to Marriott’s main website increased 21.04%.
Reporting on the state of the travel industry, Michael Bellisario of Robert W. Baird wrote that “with the worst of the Delta variant in the rearview mirror, office occupancies have been steadily increasing and travel intentions continue to rise.”
In regard to an analysis on the stock, Stuart Gordon of Berenberg Bank argued that “with booking windows still very short and uncertainty over a formal return to office for businesses, we are reluctant to assume that the recent trends will continue through the remainder of 2021.” Gordon kept his confidence to a moderate amount, and maintained a Hold rating.
On TipRanks, MAR has an analyst rating consensus of Hold, based on 1 Buy and 8 Hold ratings. The average Marriott International price target is $151.57, indicating a possible 12-month downside of -6.34%.
Disclosure: At the time of publication, Brock Ladenheim did not have a position in any of the securities mentioned in this article.
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