Hotel Stock Highlighted After Rare Upgrade

A majority of analysts already sport a "hold" rating on H

Deputy Editor
Oct 22, 2020 at 9:13 AM
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Hyatt Hotels Corporation (NYSE:H) received an upgrade to "hold" from "underperform" at Gordon Haskett this morning. The firm cited its balanced risk/reward profile at current levels, with support from the company's unit growth and liquidity. Hyatt stock is up 0.2% at $55.50 at last check. 

H has spent recent months consolidating below the $56 region, with its 200-day moving average looming overhead as well. And while the shares have doubled off their March 18 bottom of $24.02, they remain down 38% in 2020.

Today's upgrade represents a similar pattern, considering 11 of the 13 in coverage carry a "hold" rating on the stock. Meanwhile, the 12-month consensus price target of $51.94 is a 6.3% discount to current levels. Should H begin to break out, it could prompt a wave of upgrades and/or price-target hikes that could benefit the equity.

Also worth noting is the security's rising short interest. The 3.63 million shares sold short account for 9.8% of Hyatt stock's available float. At the stock's average pace of trading, it would take over four days to cover these bearish bets at H's; ample amounts of buying power that could unwind and fuel additional upside. 

Now certainly seems like a good time to take advantage of H options. This is per the security's Schaeffer's Volatility Index (SVI) of 53% sits in just the 19th percentile of all other annual readings, meaning the stock sports attractively priced premiums at the moment. Plus, the equity's Schaeffer's Volatility Scorecard (SVS) sits at a relatively high 80 out of 100. This means the stock has greatly exceeded option traders' volatility expectations during the past year -- a boon for options buyers.

 

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