Analyst Note| Dan Wasiolek |
As expected, the performance of Hilton’s high-end portfolio (exposed to urban and air travel) lagged that of economy hotels with more exposure to road destinations, which have led the rebound in travel demand. But we expect the rate of demand improvement to shift toward Hilton’s leading brands, the source of its narrow moat, due to increased vaccinations and pent-up demand for travel. We don’t plan a meaningful change to our $97 fair value estimate. At over 18 times consensus 2023 enterprise value/EBITDA (Visible Alpha), the shares appear overvalued.