Top 3 Hotel Stocks to Watch: A Buy, Hold, and Trade Opportunity
The hotel industry has been seeing a surge in stock prices following the U.S. presidential election, with high single-digit gains being observed in many hotel stocks. As we approach the holiday season, consumer discretionary stocks are in focus, and the hospitality sector presents an attractive opportunity for investors. Here are the top 3 hotel stocks to watch:
Marriott Remains a Comfortable Buy
- Company: Marriott International (NASDAQ: MAR)
- Recent Performance: Mixed earnings report with EPS missing expectations by five cents, but higher year-over-year.
- Analyst Consensus: Hold rating with a price target of $259.
- Valuation: Trading around 29x trailing earnings and 30x forward earnings.
- Dividend: Aggressively growing dividend, now at 63 cents per share.
- Recommendation: Buy on any dip or use dips to dollar-cost-average existing position.
Hilton Worldwide May Be a Little Overvalued
- Company: Hilton Worldwide (NYSE: HLT)
- Recent Performance: Beat on the bottom line but had a slight revenue miss.
- Analyst Consensus: Price target of $228.71, nearly 7% lower than the closing price on November 8.
- Valuation: Trading around 52x trailing earnings and 35x forward earnings.
- Dividend: Safe but not enticing.
- Recommendation: Hold, but not advisable to chase at current price.
Hyatt Hotels Looks Ready to Breakout
- Company: Hyatt Hotels (NYSE: H)
- Valuation: Trailing P/E ratio of around 11x earnings, significantly lower than sector average.
- Recent Performance: Beat earnings expectations by four cents, showing significant growth.
- Analyst Targets: Mizuho lowered price target to $198, still nearly 30% above current price.
- Technical Analysis: Trading in a range, indicating potential breakout.
- Recommendation: Consider taking a position around the consensus price of $151.
These top 3 hotel stocks present different opportunities for investors based on their risk appetite and investment goals. Marriott offers stability and growth potential, Hilton is slightly overvalued but focuses on premium customers, and Hyatt is positioned for a breakout with strong earnings and analyst support.
By analyzing the fundamentals, valuation, and recent performance of these stocks, investors can make informed decisions to optimize their investment portfolios and capitalize on the growth potential within the hospitality sector.