Goldman Sachs Upgrades Hilton Worldwide (HLT) to Buy; Co. Called Preferred Hotel Stock

March 3, 2014 5:07 PM EST
Get Alerts HLT Hot Sheet
Price: $57.70 --0%

Rating Summary:
    23 Buy, 5 Hold, 1 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 18 | Down: 13 | New: 9
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Goldman Sachs upgraded Hilton Worldwide (NYSE: HLT) from Neutral to Buy with a price target of $26.00 (from $23.00). Analyst Steven Kent said clarity on cash use makes Hilton a preferred hotel stock.

"In our view, there are not a lot of operational differences between HLT and its lodging peers, so to us stock selection is primarily based on other factors, notably capital allocation," said Kent.

"Four reasons to buy HLT: (1) clarity of capital allocation: all of HLT's free cash flow is going toward debt pay down, (2) timeshare strategy is underappreciated: HLT has moved asset light while increasing the number of markets it is going timeshare, (3) HLT shares have lagged the past few months: since its first day of trading, shares have increased only 4%, while MAR, HOT, and H have increased 18%, 13%, and 11% respectively over the same period, and (4) buying HLT is a relatively contrarian call: HLT has only 46% Buy ratings while Starwood has 70% Buy/overweight ratings," added the analyst.

For an analyst ratings summary and ratings history on Hilton Worldwide click here. For more ratings news on Hilton Worldwide click here.

Shares of Hilton Worldwide closed at $22.36 yesterday.

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