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Hilton Worldwide Holdings Inc HLT

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Morningstar’s Analysis

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Economic Moat


Capital Allocation


Hilton’s Strengthening Narrow-Moat Trend and Industry Recovery Appear More Than Priced Into Shares

Dan Wasiolek Senior Equity Analyst

Analyst Note

| Dan Wasiolek |

We plan to increase Hilton’s $100 fair value estimate by a mid-single-digit percentage despite incorporating a 5-percentage-point lift in the U.S. corporate tax rate starting in 2022, based on a higher conviction in our long-held view that the hotelier’s brand intangible asset (the source of its narrow moat) is strengthening. That said, with shares trading around 18.5 times consensus 2023 enterprise value/EBITDA (Visible Alpha), we think investors should wait to initiate a position.

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Company Profile

Business Description

Hilton Worldwide Holdings operates 1,019,287 rooms across 18 brands addressing the midscale through luxury segments as of Dec. 31, 2020. Hampton and Hilton are the two largest brands by total room count at 28% and 21%, respectively, as of Dec. 31, 2020. Recent brands launched over the last few years include Home2, Curio, Canopy, Tru, and Tempo. Managed and franchised represent the vast majority of adjusted EBITDA, predominantly from the Americas regions.

7930 Jones Branch Drive, Suite 1100
McLean, VA, 22102
T +1 703 883-1000
Sector Consumer Cyclical
Industry Lodging
Most Recent Earnings Jun 30, 2021
Fiscal Year End Dec 31, 2020
Stock Type Cyclical
Employees 141,000