Does Hyatt Hotels Stock Have What it Takes to Thrive Post-Pandemic?

What investors should know about Hyatt stock ahead of earnings

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Hyatt Hotels Corporation (NYSE:H) is an American multinational hospitality company. The company manages and franchises luxury and business hotels, resorts, and vacation properties. Hyatt Hotels owns 20 premier brands, which includes more than 975 hotel and wellness resort properties in 69 countries across six continents.

On April 8, Hyatt Hotels Corporation announced that it will be releasing financial results for the first quarter of 2021 after the market close on Tuesday, May 4. Hyatt will also host a conference the following day, on Wednesday, May 5. Of note, Hyatt has missed earnings expectations on all four of its latest earnings reports.

For the first quarter of 2020, Hyatt Hotels missed analysts’ estimates by a margin of $0.17 and reported an earnings per share (EPS) of -$0.35. For the second quarter of 2020, H's EPS decreased to -$1.80 and the company missed expectations by a margin of $0.48. For the third quarter of 2020, Hyatt Hotels reported an increase in EPS, rising to -$1.48 per share, but still missed estimates by a margin of $0.18. In the most recent quarterly report, Hyatt Hotels posted an EPS of -$1.77 and missed expectations yet again by a margin of $0.47. Wall Street is currently projecting that Hyatt will report an EPS of -$1.30 on May 4.

The equity has increased almost 47% over the past 12 months and Hyatt stock has just about doubled since its May 14, 2020 all-time low of $41.87. Additionally, shares of Hyatt Hotels have increased 11% year-to-date. Though the stock has fallen since it hit an annual high back in late-February, the security's 80-day moving average has kept most of this pullback in check. 

From a fundamental point of view, Hyatt isn’t in as bad of a position as one may have expected from a hotel coming out of a pandemic that crushed vacation stocks. Hyatt Hotels' revenues did decrease a significant 59% in fiscal 2020, while net income fell to -$703 million from $766 million in 2019. However, Hyatt's balance sheet doesn’t look half bad, all things considered. Despite having operations severely restricted, H was able to maintain a total debt amount of just $3.65 billion. Meanwhile, the cash balance of $1.88 billion should be plenty enough to sustain operations while the travel industry continues to pick up. Overall, Hyatt Hotels stock may continue seeing weakness in the short-term but, once business picks up in 2022 and the figures begin to reflect in H stock earnings, Hyatt stock will likely turn bullish once again.

 

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