Analyst Note| Kevin Brown |
First-quarter results for no-moat Park Hotels and Resorts were slightly better than we anticipated, leading us to reaffirm our $26.50 fair value estimate. Occupancy improved to 65.0% in the first quarter from 50.8% in the first quarter of 2022. Average daily rate was up 6.6% year over year. As a result, revenue per available room improved by 36.5% in the first quarter, in line with our estimate of 37.6% growth. EBITDA margins improved 550 basis points to 24.2%, which was better than our estimate of 21.7% EBITDA margins. Therefore, Park Hotels reported hotel EBITDA growth of 81.2% that was slightly better than our estimate of 76.2% hotel EBITDA growth. Adjusted funds from operations came in at $0.42 per share, which was 9 cents better than our $0.33 estimate and significantly above the $0.08 figure reported in the first quarter of 2022.