On Wednesday morning, Hilton Worldwide (NYSE: HLT) reported its second-quarter
earnings. The company presented mixed results, beating expectations on earnings but
slightly missing revenue estimates. Hilton reported earnings per share (EPS) of $1.91,
surpassing the estimated $1.85. However, revenues came in at $2.951 billion, just short
of the consensus estimate of $2.973 billion.
In the second quarter, Hilton opened 165 new hotels, achieving net room growth of
18,000 rooms. The company recently expanded its “lifestyle portfolio” with the
acquisition of the Graduate brand and its 32 hotels. As of June 30, 2024, Hilton's
development pipeline included nearly 3,370 hotels with almost 508,300 rooms across
136 countries.
The hotel giant has revised its earnings outlook for the entirety of 2024. The company
now projects EPS of $6.06 to $6.15, down from analyst expectations of $6.21 to $6.35.
Additionally, Hilton lowered the upper end of its projected growth in revenue per
available room to 3% from 4%, with the bottom end remaining at 2%.
Earnings reports from other travel companies such as Airbnb (NASDAQ: ABNB),
Tripadvisor (NASDAQ: TRIP), and Hyatt Hotels (NYSE: H) have raised concerns
about softening demand, particularly in the U.S. Analysts at Baird noted on Wednesday
that Airbnb's results provided "more evidence emerging of consumers tightening their
belts on travel, or at least delaying travel planning."
Despite these concerns, Hilton’s stock is up almost 12% year-to-date and has an
average price target of $219.96, implying about an 8% upside from its current price of
approximately $203 per share. However, Hilton's stock was down 1.74% at market close
on Wednesday.
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