Shares of Hyatt Hotels Corporation (NYSE: H) rose 6.3% on Tuesday after the company reported better-than-expected first-quarter results. The company engages in the development and management of resort and hotel chains.
Results in Detail
Quarterly revenues rose significantly to $1.28 billion from $438 million in the same quarter last year, surpassing the consensus estimate of $947.7 million.
Adjusted loss per share for the quarter stood at $0.33, compared with the year-ago loss of $3.57 per share. Analysts had estimated a loss of $0.43 per share.
Hyatt’s comparable system-wide RevPAR rose 107% year-over-year to $93.98, while U.S. hotel RevPAR increased 126% to $104.45. Net rooms growth stood at 18.6% during the quarter.
The President and CEO of Hyatt, Mark S. Hoplamazian, said, “We expect the rate of recovery to broaden and strengthen in the months ahead as evidenced by the strong pace of actualized and future bookings for business and group travel. Our outlook remains very optimistic for the remainder of the year with system-wide RevPAR in April accelerating further from March.”
For full-year 2022, capital expenditures are expected to be about $210 million. Also, adjusted selling, general, and administrative expenses are anticipated to be in the range of $460 million to $465 million. Net rooms growth is projected at 6%.
Following the release, Deutsche Bank analyst Carlo Santarelli maintained a Hold rating on Hyatt and lowered the price target to $94 from $95. The new price target implies 10.8% upside potential from current levels.
The analyst said, “While we can’t dismiss the positives, we do believe the still ~30% owned & leased exposure will lead to some more volatility in this environment, especially once the leisure strength softens and the baton is passed to group / corporate. At current levels, we believe the valuation is fair and we continue to rate shares Hold.”
Based on three Buys, five Holds and one Sell, the stock has a Hold consensus rating. Hyatt’s average price target of $97.22 implies 14.6% upside potential from current levels. Shares have gained 8.2% over the past year.
With the help of TipRanks’ Website Traffic Tool, one can predict a company’s performance well ahead of its results.
According to the tool, in the first quarter, the Hyatt website’s total projected worldwide visits rose 53.1% year-over-year, which is visible in the year-over-year growth witnessed in the revenues for the reported quarter.
Hyatt’s quarterly performance has been decent. Further, strong travel demand is likely to support its financials going ahead. However, soaring inflation may demoralize investors to some extent.
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