Hilton Worldwide (HLT) 2018 Lodging Outlook - Nomura Instinet

Nomura analyst, Harry Curtis, thinks that lodging stocks should continue to outperform in 2018E driven by accelerating corporate profit growth, higher consumer confidence and muted national supply growth. Importantly, EBITDA and EPS multiples do not need to expand.

The analyst stated "we assume that high ROIC stocks’ P/E multiples contract somewhat given their LTM outperformance. It has been two+ years since investor sentiment was positive on the sector, which has been improving lately due to lower tax rates and higher credit card fees. In 2018, the catalysts change to stronger RevPAR growth and return of even more free cash to shareholders".

The analyst's top picks are Hilton Worldwide (NYSE: HLT), Marriott (NASDAQ: MAR), Extended Stay America (NYSE: STAY), Hilton Grand Vacations (NYSE: HGV), and Playa Hotels & Resorts (NASDAQ: PLYA).

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