In a report released today, Geraldine Wong from DBS maintained a Hold rating on Hilton Worldwide Holdings (HLT – Research Report), with a price target of $223.00.
Geraldine Wong’s rating is based on several key considerations. Hilton Worldwide Holdings has demonstrated strong financial performance, with an 11% year-over-year increase in Adjusted EBITDA and a 2.7% rise in system-wide RevPAR. However, the company’s current valuation appears stretched, trading at 20.9 times forward EV/EBITDA, which is above its five-year average of 17.3 times. This high valuation suggests that much of Hilton’s growth potential is already reflected in its stock price.
Additionally, Hilton’s growth strategy heavily relies on net unit growth rather than RevPAR, which may limit its ability to capitalize on the recovery in international travel. The company’s exposure to the Asia-Pacific region and upscale leisure segments is relatively low, which could hinder its ability to benefit from global RevPAR improvements. Furthermore, Hilton’s significant dependence on business travel, which accounts for about 50% of its room demand, introduces volatility due to its sensitivity to macroeconomic conditions. These factors collectively contribute to the Hold rating, as they suggest limited upside potential in the near term.