Why Hyatt Hotels (H) Stock Is Climbing Today

NEW YORK (TheStreet) -- Hyatt Hotels (H) shares after up 1.2% to $57.29 on Monday after being upgraded to "buy" from "hold" by analysts at Stifel Nicolaus (SF) on Monday who maintained the company's $67 price target.

The company's price target represents an 18.4% upside from the hotel chain's closing price on Friday.

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Separately, TheStreet Ratings team rates HYATT HOTELS CORP as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:

"We rate HYATT HOTELS CORP (H) a BUY. This is driven by multiple strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth and solid stock price performance. We feel these strengths outweigh the fact that the company has had sub par growth in net income."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The revenue growth came in higher than the industry average of 5.8%. Since the same quarter one year prior, revenues slightly increased by 6.0%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • Compared to its closing price of one year ago, H's share price has jumped by 28.25%, exceeding the performance of the broader market during that same time frame. Turning to the future, naturally, any stock can fall in a major bear market. However, in almost any other environment, the stock should continue to move higher despite the fact that it has already enjoyed nice gains in the past year.
  • HYATT HOTELS CORP's earnings per share declined by 31.4% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, HYATT HOTELS CORP increased its bottom line by earning $1.30 versus $0.53 in the prior year. For the next year, the market is expecting a contraction of 15.0% in earnings ($1.11 versus $1.30).
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Hotels, Restaurants & Leisure industry. The net income has significantly decreased by 33.9% when compared to the same quarter one year ago, falling from $112.00 million to $74.00 million.
  • The gross profit margin for HYATT HOTELS CORP is rather low; currently it is at 23.40%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 6.39% trails that of the industry average.
  • You can view the full analysis from the report here: H Ratings Report
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