Story updated at 10:05 a.m. to reflect market activity.
Shares of Hilton were falling -0.9% to $24.58 in morning trading.
He analyst firm also increased its EPS estimates for the hotel operator, reiterating its "buy" rating. Analysts Harry C. Curtis, Brian H. Dobson, and Kelvin Wang believe the company can expand its margins.
"HLT should increase EBITDA at a 13% CAGR through 2016E," the analysts wrote. "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."
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