Hilton (HLT) PT Raised at Nomura on High Conviction
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Nomura Securities analyst Harry Curtis reiterated a Buy rating and bumped his price target on Hilton Worldwide (NYSE: HLT) from $26 to $29 calling it their highest conviction call in lodging.
Curtis comments, "HLT’s operating leverage to group’s recovery (owned and leased hotels) and ADR growth, coupled with its attractive valuation of 12.1x 2015E EBITDA make it our top pick in the lodging sector. HLT should increase EBITDA at a 13% CAGR through 2016E. Over that period, HLT’s leverage should decline to 3.2x in 2016 from 5.3x in 2013. Factors that should lift HLT’s growth rate higher than most in its peer group are: 1) high operating leverage to stronger than expected global RevPAR growth given HLT’s 8 “big box” urban convention hotels, 41 majority owned or controlled hotels, 31 JV hotels, and 75 leased locations, 2) the out-sized EBITDA margin expansion that these hotels should have, and 3) its pipeline of ~200k rooms supports 6% annual growth. "
Shares of Hilton Worldwide closed at $24.80 yesterday.
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