2. Hilton Worldwide Holdings Inc. (NYSE:HLT)
Billionaire Bill Ackman’s Q1’2024 Stake Value: $1,958,437,506
Texas-based hotels and resorts company Hilton Worldwide Holdings Inc. (NYSE:HLT) is one of the best stocks to buy in 2024 according to Bill Ackman. Pershing Square owns a $1.96 billion. In April, Hilton Worldwide Holdings Inc. (NYSE:HLT) posted solid Q1 results. Revenue in the quarter rose 12.2% year-over-year to $2.57 billion. Hilton Worldwide Holdings Inc. (NYSE:HLT) expects system-wide RevPAR on a currency neutral basis to increase between 2% to 4% in 2024. Investors cheered Hilton Worldwide Holdings Inc.’s (NYSE:HLT) double-digit growth in sales during the quarter and also liked occupancy rate and higher average daily rates (ADR). EBITDA margins in the period expanded to 29.1%. Hilton Worldwide Holdings Inc. (NYSE:HLT) said its positive results were driven by better-than-expected international RevPAR performance, license fee growth, and timing items. In April, J.P. Morgan started covering the stock with an Overweight rating. JPMorgan’s Ryan Lambert said Hilton Grand Vacations (HGV) has “transformed significantly” since its spin-off from Hilton Worldwide Holdings Inc. (NYSE:HLT) in 2017. The analyst thinks the stock presents an attractive opportunity to gain exposure to the timeshare business at a decent valuation.
Hilton Worldwide Holdings Inc. (NYSE:HLT) is trading at 25x its 2025 EPS estimate set by Wall Street. Compared to the industry median P/E of 18.15 this metric is still high. However, given Wall Street expectations of a 16.00% growth in earnings for Hilton Worldwide Holdings Inc. (NYSE:HLT), the valuation level is justified. Over the next five years, Hilton Worldwide Holdings Inc. (NYSE:HLT) is expected to grow its earnings at 28.53% on a per-annum basis. Revenue growth in 2025 is expected to come in at 8%.
Baron Real Estate Fund stated the following regarding Hilton Worldwide Holdings Inc. (NYSE:HLT) in its first quarter 2024 investor letter:
“We recently acquired additional shares of Hilton Worldwide Holdings Inc. (NYSE:HLT). Hilton is the second largest hotel company in the world with 7,500 properties, 1.2 million rooms, 22 unique brands, and 180 million loyalty members in its database. Hilton has a superior executive team led by long-time CEO Chris Nassetta (over 16 years as CEO).
In March, we attended Hilton’s Investor Day in Washington, D.C. and also spent time with Chris in advance. Our main takeaway from the Investor Day presentations, besides being able to meet with a deeper and impressive layer of the management organization, is that Hilton’s growth prospects over the next five years are superior to the prior five due to: i) accelerating unit growth driven by new and existing brands; ii) several brand ‘seedlings’ planted with significant white space for growth (e.g., Graduate Hotels, SLH, LivSmart); and iii) Hilton’s better ability to capture the brand ‘conversion’ opportunity irrespective of new hotel construction/development…” (Click here to read the full text)
