These 3 are the Best Hotel Stocks to buy in April 2024, as per Wall Street analysts. The demand for hotels has increased significantly, as pent-up demand picked pace following the easing of pandemic-led restrictions. It’s no surprise that the travel sector is booming and is expected to strengthen even more this year, with the expectation of cooling inflation and interest rates as the year progresses.
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With the earnings of each of these companies at the doorstep, it would be interesting to understand how the three hotel companies are performing, what the Street expects, and what differentiates them from the rest. Let’s dive right into them.
#1 Hilton Grand Vacations Inc. (NYSE:HGV)
Hilton Grand Vacations has a slightly different model than conventional hotels. It is a global timeshare company and Hilton’s exclusive vacation ownership partner. A timeshare means distributed ownership or leasing of vacation property, wherein several buyers have the exclusive right to use the property for a limited time.
HGV is expected to report its Q1 FY24 results sometime in early May. The Street expects HGV to post adjusted earnings per share (EPS) of $0.74 on revenue of $1.12 billion. In the prior-year quarter, HGV posted adjusted EPS of $0.79 on revenue of $934 million.
Importantly, HGV completed the acquisition of Bluegreen Vacations on January 17, 2024, for $1.6 billion. The acquisition is expected to add scale and diversify the company’s revenue base. HGV is also repurchasing shares to reward shareholders. As of February 23, HGV had $289 million of remaining availability under its 2023 Repurchase Plan.
Is HGV a Good Buy?
With five unanimous Buy ratings, HGV stock has a Strong Buy consensus rating on TipRanks. The average Hilton Grand Vacations price target of $59.20 implies 37.5% upside potential from current levels. In the past year, HGV shares have lost 7.2%.
#2 MGM Resorts International (NYSE:MGM)
MGM Resorts is a global hospitality and gaming company, operating destination resorts in Las Vegas, Massachusetts, New Jersey, and other U.S. destinations, and internationally in China and Japan. Furthermore, MGM’s 50/50 venture, BetMGM, provides U.S. sports betting and online gaming through brands like BetMGM and PartyPoker.
MGM is set to release its Q1 FY24 results on May 1, after the market closes. The Street forecasts MGM to report adjusted EPS of $0.56 on net revenue of $4.23 billion. These estimates reflect a significant improvement from Q1 FY23 numbers of adjusted EPS of $0.44 and net revenue of $3.87 billion.
Analysts are optimistic about MGM based on the solid ramp in Macau casinos, although concerns about global economic recovery remain. Importantly, analysts are excited about the BetMGM growth story as it increases its presence, with online wagering becoming legalized in additional states.
Is MGM a Buy, Sell, or Hold?
On TipRanks, MGM stock has a Strong Buy consensus rating based on 12 Buys and two Hold ratings. The average MGM Resorts International price target of $57 implies 35.6% upside potential from current levels. MGM shares have lost 5.7% in the past year.
#3 Wyndham Hotels & Resorts (NYSE:WH)
Wyndham Hotels & Resorts franchises and operates a portfolio of 24 iconic hotel brands globally. WH boasts to be the world’s largest hotel franchisor, with roughly 9,200 hotels spanning 95 countries. Notably, WH pays a regular quarterly dividend of $0.38 per share, reflecting an above-average yield of 1.85%.
WH is set to release its Q1 FY24 results on April 24, after the market closes. The Street expects WH to report an adjusted EPS of $0.78 on fee-related revenues of $312.30 million. In the comparative prior year period, WH reported adjusted EPS of $0.95 per share on fee-related revenues of $308 million.
Wyndham’s Board was relieved that Choice Hotels (NYSE:CHH) ended its attempt of unsolicited and hostile pursuit of Wyndham Hotels & Resorts on March 11, 2024. The board is confident about the management’s ability to strategically steer WH to a path of success on a standalone basis.
Is Wyndham Stock a Good Buy?
With six unanimous Buys, WH stock commands a Strong Buy consensus rating on TipRanks. The average Wyndham Hotels & Resorts price target of $91.83 implies 32.2% upside potential from current levels. In the past year, WH shares have gained 2.3%.
Ending Thoughts
The hotel industry belongs to the consumer cyclical sector, which is impacted by macro factors. The sector tends to outperform the general market when the economy is expanding. The aforementioned three hotel stocks have earned bullish views from analysts and have upside potential in the next twelve months.
