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Hilton Worldwide Holdings Inc HLT

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Morningstar’s Analysis

Valuation
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1-Star Price

PREMIUM

5-Star Price

PREMIUM

Economic Moat

PREMIUM

Capital Allocation

PREMIUM

Hilton's Demand Recovery Should Pick Up Steam in Rest of 2021; Brand Advantage Remains Stout

Dan Wasiolek Senior Equity Analyst

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.

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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.

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

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