1. Playa Hotels & Resorts NV (NASDAQ:PLYA)
Upside Potential: 50.53%
Price target: $12.75
Number of Hedge Fund Holders: 24
Playa Hotels & Resorts NV (NASDAQ:PLYA), a leader in luxury all-inclusive oceanfront resorts in the Caribbean, has been on an impressive run rallying by nearly 30% year to date. The company has benefited from an uptick in tourism traffic and booking prices following the lifting of COVID restrictions and restoration of tourist traffic. Its operating marine has already reached its record high of 28.1%.
Playa Hotels & Resorts NV (NASDAQ:PLYA) currently holds a consensus rating of Moderate Buy. This rating is derived from 3 buy ratings, 0 hold ratings, and 1 sell rating provided by analysts. Playa Hotels & Resorts NV has an average price target of $12.75, with the highest analyst price target being $16 and the lowest forecast set at $8. The improving business environment in the tourism sector is one reason analysts have an average price target of $12.75, implying a 50.53% upside potential to current levels.
According to Insider Monkey’s first-quarter 2023 hedge fund survey, out of the 943 hedge funds analyzed, 24 of them had chosen to invest in Playa Hotels & Resorts NV (NASDAQ:PLYA). Notably, among these investors, Davidson Kempner, led by Thomas Lenox Kempner, emerged as the largest shareholder, holding a significant stake valued at $145.22 million.
In its investor letter for the second quarter of 2023, Silver Beech Capital provided a comment or statement concerning Playa Hotels & Resorts N.V. (NASDAQ:PLYA):
“Playa Hotels & Resorts N.V. (NASDAQ:PLYA) is a small-capitalization owner/operator of 25 all-inclusive resorts in Mexico (Cancun and Pacific Coast), the Dominican Republic, and Jamaica. Playa’s portfolio is branded (mostly Hilton and Hyatt), includes primarily luxury/upscale resorts, and operates at among the highest margins in the hotel industry. Playa’s resorts are irreplaceable assets in supply-constrained markets that continue to benefit from rising post-COVID international tourism.
We believe the public market discounts Playa’s shares based on recessionary fears, however, strong international flight data into Playa’s regional airport hubs do not support this view, and spot private market valuations for Playa’s hotels exceed its public market valuation. Management has demonstrated impressive capital allocation to address this valuation gap by moderating growth capital expenses for only the highest return projects and looking to sell select strategic resorts and repurchase shares at today’s attractive level. Over the last two quarters, Playa has repurchased more than 4% of the company’s outstanding shares. The company trades at a TEV/EBITDA of 7.6x (2023E), and a low double-digit free cash flow yield. We believe Playa’s intrinsic value is more than 50% greater than its June 30 share price.”
Follow Playa Hotels & Resorts N.v. (NASDAQ:PLYA)
Follow Playa Hotels & Resorts N.v. (NASDAQ:PLYA)
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