If Hyatt Hotels Corp.’s (H) proposed takeover of Playa Hotels & Resorts (PLYA) goes through, it could be the hospitality company’s most significant acquisition since the 2021 purchase of Apple Leisure Group, according to Bernstein analyst Richard Clarke. In a flash commentary, Clarke highlighted the transformative impact Hyatt’s potential acquisition of Playa could have.
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Bernstein Analyst Is Upbeat About the Proposed Acquisition
The analyst praised Hyatt’s ability to juggle multiple strategic initiatives without losing focus, expressing confidence that the Playa transaction, if realized, would not detract from the company’s broader growth trajectory.
Furthermore, the analyst believes the acquisition would align with Hyatt’s aggressive expansion in the all-inclusive resort segment. Clarke also noted that Playa Hotels & Resorts, known for its boutique and smaller-scale properties, would help diversify Hyatt’s portfolio, which is more focused on large-format offerings. Playa’s assets, he added, could bolster Hyatt’s competitive edge and increase its market share. Importantly, Clarke noted that the transaction would likely be accretive to Hyatt’s earnings.
Hyatt-Playa Deal Is Complex
However, the deal is not without complexities. Playa operates 24 hotels, owning 16 of them, which makes it an asset-heavy business. The analyst believes that Hyatt would likely divest much of this real estate over time. As a result, Clarke commented, “The true merits of the deal would therefore depend on how much property value could be recouped, which may not be known for many years.”
Clarke has a Buy rating and a price target of $188 on Hyatt stock. His price target implies an upside potential of 18.5% from current levels.
Is Hyatt a Good Stock to Buy?
Analysts remain cautiously optimistic about Hyatt stock, with a Moderate Buy consensus rating based on seven Buys and nine Holds. Over the past year, Hyatt has increased by more than 20%, and the average H price target of $163.61 implies an upside potential of 3.2% from current levels.
