S&P 500   4,594.62
DOW   34,899.34
QQQ   391.20
S&P 500   4,594.62
DOW   34,899.34
QQQ   391.20
S&P 500   4,594.62
DOW   34,899.34
QQQ   391.20
S&P 500   4,594.62
DOW   34,899.34
QQQ   391.20

7 Hotel Stocks Just Waiting For the Vaccine

Posted on Friday, February 12th, 2021 by MarketBeat Staff
7 Hotel Stocks Just Waiting For the VaccineLike any group of stocks related to travel and tourism, hotel stocks saw a steep drop in share prices in 2020. The leisure and hospitality sector that once had 15 million employees has lost 4 million jobs since February.

Many major cities will be feeling the ripple effects of the Covid-19 pandemic for years. However, there is ample evidence that shows the pandemic may be coming to an end. The number of new cases is dropping. The number of those getting vaccinated is rising. And even in the cities with the most restrictive mitigation measures, the slow process of reopening is beginning.

All of this can’t come fast enough for individuals who rely on the travel and tourism industry for their livelihood. Hotel chains had at least some revenue coming in the door. And when earnings season concludes, the more budget-friendly hotel chains may realize revenue that is 75% of its 2019 numbers. But that is not enough to bring the hotels to anywhere near full employment. Particularly with hotels that have bars and restaurants that have remained closed or open at limited capacity.

Many economists are optimistic that travel may begin to look more normal by the summer of this year. And the global economy may deliver 6.4% GDP growth this year. With that in mind, the hotel chains with the best fundamentals and the broadest footprint will be in the best position as the economy reopens.

#1 - Hilton (NYSE:HLT)

Hilton Worldwide logo

If you were going to invest in hotels right now, many investors would say to look to buy shares of a real estate investment trust that specialized in hotel chains. Or, you could buy Hilton (NYSE:HLT) stock. It’s maybe not the same thing. However, one thing that made Hilton different from many hotel chains was that it lent its name and branding to properties and then operated as a REIT.

This was a profitable model for the company until the pandemic set in and those franchises had difficulty paying the rent. Fortunately, Hilton did have revenue coming in on the properties that it continues to own outright.

Through three quarters, Hilton is reporting just $3.4 billion in earnings which will leave the company well shy of the $9.45 billion it drew in 2019. Still, the company has ample cash and is seeing its stock price close in on its pre-pandemic level. Analysts are also warming up to HLT stock and have it as a consensus buy.

About Hilton Worldwide

Hilton Worldwide Holdings, Inc engages in the provision of hospitality businesses. It operates through the following segments: Ownership and Management & Franchise. The Ownership segment includes owned, leased, and joint venture hotels. The Management & Franchise segment manages hotels and timeshare properties, and license its brands to franchisees.Read More 
Current Price
$136.21
Consensus Rating
Hold
Ratings Breakdown
6 Buy Ratings, 9 Hold Ratings, 0 Sell Ratings.
Consensus Price Target
$137.53 (1.0% Upside)




#2 - Hyatt (NYSE:H)

Hyatt Hotels logo

As you might expect, luxury hotel chains have been among the most hardest hit in terms of revenue. Through the first three quarters of 2020, Hyatt (NYSE:H) reported $1.6 billion in revenue. That number is less than a third of the $5 billion it recorded in 2019.

That’s the bad news. The good news is that investors who took a chance on Hyatt stock at the onset of the pandemic have been rewarded with a gain of just over 100%. In fact the stock is down less than 20% from its pre-pandemic level.

Analysts are lukewarm on Hyatt giving it a consensus hold. However, the hotel chain is receiving multiple price target increases suggesting a bullish trend.

The easy gains may be gone, but it’s likely that a hotel chain with such a strong brand association and a portfolio that includes 900 properties in over 60 countries will not recover.

About Hyatt Hotels

Hyatt Hotels Corp. engages in the development and management of resort and hotel chains. It operates through the following segments: Owned and Leased Hotels; Americas Management and Franchising; ASPAC Management and Franchising; and EAME/SW Asia management and Franchising. The Owned and Leased Hotels segment offers hospitality services and hotels.Read More 
Current Price
$78.13
Consensus Rating
Hold
Ratings Breakdown
1 Buy Ratings, 12 Hold Ratings, 2 Sell Ratings.
Consensus Price Target
$74.37 (4.8% Downside)




#3 - Choice Hotels (NYSE:CHH)

Choice Hotels International logo

Choice Hotels (NYSE:CHH) is one of the hotel chains that is on pace to report a “less bad” revenue shortfalls in 2020. For all of 2019, the company generated just over $1.1 billion in revenue. Through three quarters in 2020, Choice Hotels has reported $580.60 million. If the company’s fourth-quarter revenue comes in similar to the prior quarter, the hotel will come in at somewhere around $800 million or just about 20% lower on a year-over-year.

That’s not great, but it does mean that the hotel chain doesn’t have quite so far to bounce to get back to pre-pandemic revenue levels. Investors seem to agree as shares of CHH stock are now right about at the level they were a year ago.

One of the reasons for this relative strength in revenue comes from the chain’s expansive footprint which covers over 7,000 properties in 41 countries and territories internationally.

About Choice Hotels International

Choice Hotels International, Inc engages in the franchising and operations of hotels. It operates through Hotel Franchising, and Corporate and Other segments. The Hotel Franchising segment refers to the hotel franchising operations consisting of the company's several hotel brands. The Corporate and Other segment deals with hotel revenues and rental income related to office building owned by the company.Read More 
Current Price
$144.32
Consensus Rating
Hold
Ratings Breakdown
1 Buy Ratings, 6 Hold Ratings, 0 Sell Ratings.
Consensus Price Target
$124.25 (13.9% Downside)




#4 - InterContinental Hotels (NYSE:IHG)

InterContinental Hotels Group logo

While many of the hotel chains on this list have an international footprint, InterContinental Hotels (NYSE:IHG) is the first that is headquartered overseas. The company is based in England specifically but has over 5,900 properties across the globe. Some of the recognizable brand names include Holiday Inn and Candlewood Suites.

In its most recent earnings report, the company said that is revenue per available room (RevPAR) fell 53% globally. However that was an improvement from the 75% decline in RevPAR from the prior quarter. The company is also showing strength in the United States and cited two reasons for that. First, its properties fall in the mainstream segment, and second they are primarily located in non-urban locations.

Like many of the hotel chains on this list, IHG stock price is higher than it was prior to the pandemic. That suggests that analysts are projecting the company to have the possibility for strong growth particularly since the diverse nature of its holdings should allow weakness in any one property to be offset by strength in others.

About InterContinental Hotels Group

InterContinental Hotels Group Plc owns and operates hotels. The firm's hotel brands include: InterContinental, Crowne Plaza, Hotel Indigo, Holiday Inn, Holiday Inn Express, Staybridge Suites, Candlewood Suites, EVEN Hotels, IHG Rewards Club, Kimpton and HUALUXE Hotels and Resorts. It operates through the following segments: Europe, Middle East, Asia and Africa, Americas, Greater China and Central.Read More 
Current Price
$62.76
Consensus Rating
Hold
Ratings Breakdown
7 Buy Ratings, 5 Hold Ratings, 2 Sell Ratings.
Consensus Price Target
N/A




#5 - Wyndham Hotels & Resorts (NYSE:WH)

Wyndham Hotels & Resorts logo

Being the largest may have its advantages. At least that seems to be the case for Wyndham Hotels & Resorts (NYSE:WH). The company recently posted its fourth-quarter earnings and came in with full-year revenue of $1.3 billion which was about 35% lower than the $2.05 billion it recorded in 2019.

Still that’s a less bad number that investors can work with. And the company recorded a beat on both the top and bottom lines. That made it three out of four quarters in which the company topped analysts’ estimates.

Wyndham has over 9,000 locations worldwide and includes some of the best-known value chains such as Super 8, Ramada, Days Inn, and Howard Johnson.

Wyndham’s stock price has recently made it back to pre-pandemic levels and analysts are giving the stock a consensus rating of buy. The stock remains about 10% shy of when it went public in 2018. But the company has an impressive market cap that currently sits at around $5.6 billion.

About Wyndham Hotels & Resorts

Wyndham Hotels & Resorts, Inc engages in the franchise and operation of hotels under the Wyndham brand. It operates through the following segments: Hotel Franchising and Hotel Management. The Hotel Franchising segment offers licenses of brand names and associated trademarks to hotel owners under long-term franchise agreements.Read More 
Current Price
$81.85
Consensus Rating
Buy
Ratings Breakdown
7 Buy Ratings, 0 Hold Ratings, 0 Sell Ratings.
Consensus Price Target
$86.29 (5.4% Upside)




#6 - Marriott (NASDAQ:MAR)

Marriott International logo

I wrote about Marriott (NASDAQ:MAR) at about this time last year. Perhaps full of cockeyed optimism, I made the association that good stocks do not suddenly become bad. And that regarding the impact of the virus, the known would be worse than the unknown.

Well perhaps Marriott would have liked the known to be not quite as bad. But I still hold a bullish sentiment towards Marriott. Of the stocks on this list, it is still down from pre-pandemic levels. The company’s revenue has also taken a major hit and will likely be about 50% less on a year-over-year basis.

Marriott is also one of the most covered hotel stocks by analysts. And they’re pretty lukewarm to the company as well. The 23 analysts that have rated the stock have a consensus hold.

I still like the stock. Revenue and earnings are trending the right way. And the company has a portfolio of iconic brand names. The company has solid fundamentals and over time, fundamentals will matter as the hotel industry comes out of this pandemic.

About Marriott International

Marriott International, Inc engages in the operation and franchise of hotel, residential, and timeshare properties. It operates through the following business segments: U.S. & Canada; Asia Pacific; and Europe, Middle East and Africa (“EMEA“). The company was founded by J. Wiliard Marriot and Alice Sheets Marriott in 1927 and is headquartered in Bethesda, MD.
Current Price
$147.44
Consensus Rating
Hold
Ratings Breakdown
4 Buy Ratings, 7 Hold Ratings, 0 Sell Ratings.
Consensus Price Target
$150.73 (2.2% Upside)




#7 - MGM Resorts International (NYSE:MGM)

MGM Resorts International logo

The last stock on our list is not a pure play hotel stock. However MGM Resorts International (NYSE:MGM) should definitely be on your list of stocks to buy as the economy reopens. MGM properties are a destination for many travelers, particularly those heading to Las Vegas. And an investment in MGM gives you exposure to both the casino and sports betting industries, the latter of which is becoming a closely watched growth opportunity.

Prior to casinos reopening, I wouldn’t have recommended MGM. In fact, the pandemic came at possibly the worst time for the company because it had just launched is BetMGM mobile betting app. It’s true that only about 18 states have legalized sports betting. But more are on the way. There are too many states that are trying to make up for massive losses in their budgets. Sports betting won’t take care of all of it, but it will help.

About MGM Resorts International

MGM Resorts International is a holding company, which engages in the ownership and operations of casino resorts. The firm's casino resorts offer gaming, hotel, convention, dining, entertainment, retail, and other resort amenities. It operates through the following business segments: Las Vegas Strip Resorts, Regional Operations and MGM China.Read More 
Current Price
$41.85
Consensus Rating
Hold
Ratings Breakdown
8 Buy Ratings, 6 Hold Ratings, 1 Sell Ratings.
Consensus Price Target
$47.59 (13.7% Upside)



 

According to CareerBuilder CEO Irina Novoselsky, the hotel industry along with other companies in the hospitality industry, are making plans to ramp up hiring in anticipation of strong demand. And when you consider that many hotel chains on this list have credit cards tied to reward program, you have to expect that demand will be real.

However until there is more substantial evidence of a sustained economic recovery, hotel stocks will carry a risk premium. Investors may not see the recovery reflected in corporate earnings until late in 2021. However the hotel industry – particularly those chains that are less reliant on international revenue – should start realizing increased reservations as more Americans feel more comfortable about traveling.

Investors who want to speculate in this market without choosing a particular stock will have to be a bit selective when looking at the exchange-traded funds (ETFs). There is no ETF that is wholly dedicated to the hotel sector, but the Invesco Dynamic Leisure and Entertainment ETF (NYSEARCA:PEJ) has 40.6% of its exposure in the hotels, restaurant, and leisure sectors.

15 Energy Stocks Analysts Love the Most

There are more than 450 energy companies traded on public markets. Given the sheer number of pipeline companies, power plant operators, oil and gas production companies, and other energy stocks, it can be hard to identify which energy companies will outperform the market.

Fortunately, Wall Street's brightest minds have already done this for us. Every year, analysts issue approximately 8,000 distinct recommendations for energy companies. Analysts don't always get their "buy" ratings right, but it's worth taking a hard look when several analysts from different brokerages and research firms are giving "strong-buy" and "buy" ratings to the same energy stock.

This slide show lists the 15 energy companies with the highest average analyst recommendations from Wall Street's equities research analysts over the last 12 months.

View the "15 Energy Stocks Analysts Love the Most" Here.





Resources

Premium Research Tools

MarketBeat All Access subscribers can access stock screeners, the Idea Engine, data export tools, research reports, and other premium tools.

Discover All Access

Market Data and Calendars

Looking for new stock ideas? Want to see which stocks are moving? View our full suite of financial calendars and market data tables, all for free.

View Market Data

Investing Education and Resources

Receive a free world-class investing education from MarketBeat. Learn about financial terms, types of investments, trading strategies and more.

Financial Terms
Details Here
MarketBeat - Stock Market News and Research Tools logo

MarketBeat empowers individual investors to make better trading decisions by providing real-time financial data and objective market analysis. Whether you’re looking for analyst ratings, corporate buybacks, dividends, earnings, economic reports, financials, insider trades, IPOs, SEC filings or stock splits, MarketBeat has the objective information you need to analyze any stock. Learn more about MarketBeat.

MarketBeat is accredited by the Better Business Bureau

© American Consumer News, LLC dba MarketBeat® 2010-2021. All rights reserved.
326 E 8th St #105, Sioux Falls, SD 57103 | U.S. Based Support Team at [email protected] | (844) 978-6257
MarketBeat does not provide personalized financial advice and does not issue recommendations or offers to buy stock or sell any security.

Our Accessibility Statement | Terms of Service | Do Not Sell My Information

© 2021 Market data provided is at least 10-minutes delayed and hosted by Barchart Solutions. Information is provided 'as-is' and solely for informational purposes, not for trading purposes or advice, and is delayed. To see all exchange delays and terms of use please see disclaimer. Fundamental company data provided by Zacks Investment Research.