Is Hilton Worldwide Holdings (HLT) A Great Buy?

Pershing Square Capital Management, an investment management firm, published its fourth-quarter 2021 investor letter – a copy of which can be downloaded here. An annual portfolio net return of 26.9% was recorded by the fund for the whole year of 2021, versus the S&P 500 Index, the FTSE 100, and MSCI World Index that delivered a 28.7%, 17.4%, and 22.3% return respectively for the same period. Spare some time to check the fund’s top 5 holdings to have a clue about their top bets for 2022.

Pershing Square Capital Management, in its Q4 2021 investor letter, mentioned Hilton Worldwide Holdings Inc. (NYSE: HLT) and discussed its stance on the firm. Hilton Worldwide Holdings Inc. is a McLean, Virginia-based hospitality company with a $41.9 billion market capitalization. HLT delivered a -3.58% return since the beginning of the year, while its 12-month returns are up by 28.65%. The stock closed at $150.41 per share on February 19, 2022.

Here is what Pershing Square Capital Management has to say about Hilton Worldwide Holdings Inc. in its Q4 2021 investor letter:

“Hilton is a high-quality business with a multi-year runway of accelerated earnings growth and an exceptional management team. Industry conditions poised to exceed pre-COVID levels in the near term.

HLT well positioned for enhanced long-term performance.

-Average daily revenue per room (“RevPAR”) likely to recover to pre-COVID levels before the end of 2022.
-Occupancy is improving with average daily rate (“ADR”) already above pre-COVID levels.
-Ability to change room rates daily provides hedge against inflation.

HLT well positioned for enhanced long-term performance.

-Market share likely to increase over time.
-Committed to higher long-term structural margins given productivity actions.
-Substantial capital return over time.

COVID-19 validated HLT’s unique high-quality asset-light business model.

-Ability to deftly navigate the “1,000-year-flood” supports higher valuation.

Hilton is poised to deliver long-term earnings meaningfully greater than pre-2020 levels. HLT’s share price including dividends increased 40% in 2021 and has decreased 2% year-to-date in 2022.”

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Our calculations show that Hilton Worldwide Holdings Inc. (NYSE: HLT) failed to obtain a mark on our list of the 30 Most Popular Stocks Among Hedge Funds. HLT was in 48 hedge fund portfolios at the end of the third quarter of 2021, compared to 44 funds in the previous quarter. Hilton Worldwide Holdings Inc. (NYSE: HLT) delivered a 4.18% return in the past 3 months.

In September 2021, we also shared another hedge fund’s views on HLT in another article. You can find other letters from hedge funds and prominent investors on our hedge fund investor letters 2021 Q4 page.

Disclosure: None. This article is originally published at Insider Monkey.