Hilton Worldwide Holdings (NYSE: HLT) has proven itself to be a strong company over the previous years, especially with Covid lockdowns in place. Few industries have been hit as hard as the hotel industry during the lockdowns, with full recovery yet to be reached.
HLT is a major player in the space which relies on fees generated from licensing out its name and managing properties. Current fiscal year performance is pointing to business improving compared to 2020.
For 2022 earnings per share are expected to improve to $3.92 from $2.08, with year-over-year sales expected to grow by 37.8%. During the fourth quarter, the company opened up 94 new hotels or 13,100 rooms which is a positive sign since it is driving unit growth a key indicator for future profitability.
HLT stock performance and analysis
The stock created a very wide side moving channel trading between $130 and $155 presenting various entry points to prospective investors. It would be fair to conclude that the mentioned prices would represent resistance points to the downside and up, respectively.
In the most recent session, the price jumped above all of the daily Simple Moving Averages with a potential to go above the upper resistance line. Trading volume in April is fairly consistent with the usual trading averages.
In the last month, HLT has been trading between the $142.15 – $156.07 range, which is quite wide. Given that it is currently trading in the middle of this range, some resistance may be found above.
Analysts are split on the stock with more holds than buys, however, the general consensus is a moderate buy with no experts advocating to sell. The price might be at a premium since the average next 12-months price analysts see stands at $151 which is 1.9% lower than the current trading price of $153.93.
Bullish analysts give the stock a $179 price target, since HLT is touted as best in class perhaps the current premium price is justified.
Sunnier days to come
With the dreary Covid lockdowns mostly over, the vacation season, driven by pent-up demand, may be very profitable for the hotel and travel stocks. Though HLT might look a bit lofty as compared to its peers the solid plan it has laid out coupled with new hotels being opened might give the company a good future cash flow.
Global issues plaguing supply chains, oil, energy, and food prices could affect the stock price and the business outlook in the short term.
However, travel demand is slowly picking up, as Finbold noted, which could spell positive developments for HLT. Investors looking to jump in should evaluate where is the best entry position for their investment risk.
Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.