Hyatt Hotels is the IBD Stock Of The Day for Wednesday as the travel industry heats up with summer around the corner. Fellow hoteliers Marriott International and Hilton are also setting up near buy points.
Cruise lines and airlines are running higher as travel demand recovers and consumers get ready for summer vacations. Bank of America upgraded Carnival to a buy rating on Monday based on strong industry demand. CCL stock broke out last week. United Airlines and American Airlines are trading in cup bases after soaring 41% and 30% respectively, this year. And aircraft maker Boeing flew into a buy zone Monday.
As of early April, 53% of all Americans and 81% of leisure travelers planned trips in the next six months, the U.S. Travel Association noted on June 2. And 26% of Americans plan to increase spending on leisure travel in the next three months, compared to 19% in Q1.
In the first quarter of 2023, U.S. hotels exceeded pre-pandemic (Q1 2019) revenue-per-available-room levels by 13%, PricewaterhouseCoopers reported in May.
Leisure travel remains strong but growth levels will likely slow in late 2023 and 2024 due to economic headwinds. But PwC expects reemerging business travel to offset softening vacation trips.
Hyatt Hotels Recovery
Hyatt recorded quarterly losses throughout the coronavirus pandemic, with one exception in Q3 2021. But the company recovered to report positive earnings since Q2 2022 and EPS growth accelerated the last two quarters. Quarterly sales vaulted in 2021 to claw back the declines from 2020 when pandemic shutdowns halted travel.
Hyatt posted record revenue four quarters in a row, spiking 31% in Q1 to $1.68 billion. However, those sales gains slowed the past three quarters.
Hyatt guided systemwide revenue-per-available-room to jump 12% to 16% for the year while its net number of rooms grows 6%. For the year, FactSet analysts expect earnings will tumble 15.5% to $2.77 per share while sales leap 12.4% to a record $6.62 billion.
On June 2, Hyatt completed its acquisition of the Mr. & Mrs. Smith travel platform, which has more than 1 million members and provides direct booking access to more than 1,500 boutique and luxury properties. The portfolio addition expands offerings to 20 new countries for World of Hyatt members, the company wrote in the release. Hyatt paid 53 million pounds, or $67.3 million, in cash
H Stock
IBD added Hyatt Hotels to the Innovator IBD 50 ETF list on May 12. The company currently ranks third in the Leisure-Lodging group according to the IBD Stock Checkup, trailing Target Hospitality and Marriott.
H stock is trading in a cup-with-handle base with a 122 buy point. A move above its June 7 high of 119.17 could offer investors an early entry point.
Hyatt Hotels shares are hovering above their 10-day moving average, after recovering back above some key levels of technical support.
Hyatt stock has an 88 Composite Rating out of a best-possible 99. The Composite Rating combines a number of technical indicators into one easy-to-read score. Shares have an 80 EPS Rating. H stock's relative strength line is off highs from early March and it has an 86 RS Rating.
H stock leapt 28.6% so far this year.
Marriott International stock is trading back below the 183.27 buy point for a flat base after a brief breakout on Tuesday. Meanwhile, Hilton shares are trading about 7% below the 152.89 buy point for its cup-with-handle base.
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