Hyatt Earnings: The Market’s Negative Reaction Is Unjustified as Demand for the Brand Remains Strong

From where we sit, we attribute the 10% decrease in Hyatt’s shares during Feb. 13 trading to 2024 net income of $1.269 billion missing Street expectations and our $1.429 billion estimate. In fact, net income would have been $1.457 billion when adjusting for an impairment charge in the quarter, which appears to be in part related to an equity investment. We view this charge as one-time and think investors should focus on the strong traveler and owner demand for Hyatt’s brands, the primary source of our narrow moat rating. At this point, we don’t plan a material change to our $147 fair value estimate. We now see shares as fairly priced after the Feb. 13 move in shares.