1. Hilton Worldwide Holdings Inc. (NYSE:HLT)
Number of Hedge Fund Holders: 60
Hilton Worldwide Holdings Inc. (NYSE:HLT) is an American hospitality company that owns, leases, develops, and franchises hotels and resorts. The company outperformed earnings estimates for the second quarter of 2022 and expects diluted EPS to fall between $4.11 and $4.36 for the full-year 2022, well above the $4.04 forecast by analysts. Hilton Worldwide Holdings Inc. (NYSE:HLT) is one of the best cyclical stocks to buy.
On September 15, Berenberg analyst Stuart Gordon upgraded Hilton Worldwide Holdings Inc. (NYSE:HLT) to Buy from Hold with a price target of $152, up from $140. The analyst noted the fast recovery in lodging has yet to be reflected in the shares. “Even allowing for the threat of a recession moving into 2023, the shape of the recovery means that we expect strong RevPAR increases in 2023 across the sector,” the analyst told investors in a bullish thesis.
According to Insider Monkey’s second quarter database, 60 hedge funds were long Hilton Worldwide Holdings Inc. (NYSE:HLT), up from 52 funds in the earlier quarter. Boykin Curry’s Eagle Capital Management is a prominent position holder in the company, with 6.45 million shares worth close to $720 million.
Here is what Pershing Square Holdings specifically said about Hilton Worldwide Holdings Inc. (NYSE:HLT) in its Q2 2022 investor letter:
“Hilton Worldwide Holdings Inc. (NYSE:HLT) is a high-quality, asset-light, high-margin business with significant long-term growth potential, led by a superb management team. The unforeseen arrival of the COVID-19 pandemic catalyzed a rapid and near-complete standstill in global travel, with RevPAR (the industry metric for same-store sales at a given hotel) down roughly 90% at the nadir of the pandemic. We increased our investment in Hilton during the pandemic as we believed the economic dislocation from COVID-19 would prove to be transient and that industry projections regarding the timeline for recovery were too pessimistic.
From the moment the pandemic began, Hilton’s management team took decisive actions to ensure the company not only managed through what it knew would be a challenging period, but also positioned the company to generate improved margins, cash flows, and investment returns once the business recovered. In hindsight, Hilton’s experience with COVID-19 – the 100-year proverbial flood – affirmed the company’s unique high-quality, asset light, high-margin business model, and reinforced our belief that Hilton deserves a premium valuation.
While Hilton entered 2022 impacted by the Omicron variant, results have vastly improved throughout the year as COVID-19 has evolved towards a more endemic virus, and consumer behavior has adapted accordingly. In recent months, Hilton’s system-wide RevPAR has surpassed 2019 levels and continues to improve. Recent strength has been led by domestic leisure travel occasions as consumer spending continues to shift from goods to services. …” (Click here to read the full text)
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