Hyatt Hotels Corporation (NYSE: H) has announced a delay in the issuance of its fourth quarter and full year 2023 earnings release and investor conference call, originally scheduled for February 15, 2024. The delay is due to the need for additional time to finalize accounting related to unlimited vacation club deferred cost activity in its Apple Leisure Group segment, which has no cash impact. The company will issue a separate press release once a rescheduled date and time have been determined.
Despite the delay, Hyatt also shared highlights from its fourth quarter and full year 2023, including strong financial performance. Comparable system-wide revenue per available room (RevPAR) increased by 9.1% in the fourth quarter and 17.0% for the full year of 2023 compared to the same periods in 2022, surpassing the full-year outlook for 2023. Additionally, the company reported robust cash flow from operations and free cash flow, both reaching the highest levels in the company's history.
Furthermore, Hyatt's net rooms grew by 5.9% for the full year of 2023, in line with the full-year outlook, and the pipeline of executed management or franchise contracts encompassed approximately 127,000 rooms. The company also declared a cash dividend of $0.15 per share for the first quarter of 2024, payable on March 12, 2024, to class A and class B stockholders of record as of February 28, 2024.
Reflecting on the company's performance, Hyatt's management provided the following outlook: "We are pleased with our strong performance in 2023, achieving record levels of cash flow from operations and free cash flow, as well as delivering on our net rooms growth and pipeline of executed management or franchise contracts. Our resilient business model and strategic investments continue to drive our results, positioning us well for the future."
Hyatt's shares have responded to the news, moving 4.1% and currently trading at a price of $134.33.
The company's full 8-K submission is available here.
| 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | |
|---|---|---|---|---|---|---|
| Revenue (M) | $4,454 | $5,020 | $2,066 | $3,028 | $5,891 | $6,595 |
| Operating Margins | 21% | 20% | -46% | 1% | 6% | 5% |
| Net Margins | 17% | 15% | -34% | -7% | 8% | 7% |
| Net Income (M) | $769 | $766 | -$703 | -$222 | $455 | $488 |
| Net Interest Expense (M) | $76 | $75 | $128 | $163 | $150 | $139 |
| Depreciation & Amort. (M) | $327 | $329 | $310 | $310 | $426 | $403 |
| Diluted Shares (M) | 115 | 106 | 101 | 104 | 111 | 107 |
| Earnings Per Share | $6.68 | $7.21 | -$6.93 | -$2.13 | $4.09 | $4.45 |
| EPS Growth | n/a | 7.93% | -196.12% | 69.26% | 292.02% | 8.8% |
| Avg. Price | $75.25 | $74.35 | $61.73 | $79.96 | $89.58 | $134.62 |
| P/E Ratio | 11.08 | 10.14 | -8.91 | -37.54 | 21.48 | 29.59 |
| Free Cash Flow (M) | $44 | $27 | -$733 | $204 | $473 | $504 |
| EV / EBITDA | 7.82 | 6.45 | -12.75 | 31.43 | 16.01 | 21.83 |
| Total Debt (M) | $1,634 | $1,623 | $3,244 | $3,988 | $3,773 | $3,055 |
| Net Debt / EBITDA | 0.83 | 0.55 | -3.13 | 8.55 | 3.53 | 3.09 |
| Current Ratio | 1.27 | 1.57 | 2.6 | 0.92 | 0.68 | 0.73 |
Based on the available data, the stock of Hyatt Hotels Corporation (H) appears to be fairly valued at a price of $134.33 per share, considering its financial performance and market position.
The growth factors for Hyatt Hotels include rapidly growing revenues at a rate of 6.8%. However, there are several negative factors to consider. These include decreasing capital expenditures at a rate of -10.3%, consistently low operating margins averaging 1.2% over the last 6 years, declining earnings per share with an annualized growth rate of -6.5%, and a negative PEG ratio.
In terms of value factors, Hyatt Hotels has total liabilities of $8.73 billion which far exceed its current assets of $1.75 billion, resulting in a net current asset level of $-6.98 billion. Additionally, the company is trading above its fair value with a P/E ratio of 30.2 and a P/B ratio of 3.88. Hyatt Hotels also makes significant use of leverage, with a Net Debt / EBITDA ratio of 3.09, higher than the sector average. These factors suggest that the stock is trading at a premium compared to its historical average P/E ratio of 6.51.
It's important to note that this analysis is not personalized financial advice and individuals should conduct their own research before making any investment decisions.
