Hyatt stock surges after reiterating EBITDA guidance

Investing.com -- Hyatt Hotels (NYSE: H) shares rose 6.44% after the company reported first quarter results and maintained its full-year EBITDA guidance despite near-term pressure in Mexico.

The hotel operator posted first quarter results largely in-line with expectations, with stronger revenue per available room driving upside in the owned and leased segment. Better cost control also contributed to the results, though the distribution segment faced headwinds from Mexico.

Hyatt reiterated its EBITDA guidance for the year, supported by improved RevPAR growth. The company reported a 4% increase in RevPAR and approximately 7% growth in rooms during the fourth quarter, with its development pipeline expanding 7% YoY.

"The main investor concern for Hyatt going into the quarter was if pressure in Mexico would cause the company to lower full-year guide and such fears did not come to fruition as EBITDA guide is maintained," Truist analysts commented.

Morgan Stanley analysts noted, "We expect the stock to come under pressure initially on the headline guide below street. Even adjusting for the Hurricane impact and JV EBITDA treatment change, the midpoint of guide would have been below consensus, likely owing to weaker underlying distribution segment (skewed to Caribbean). Underlying FCF guidance was more promising, still pointing to 22-30% growth yoy, and other KPIs during the quarter and along with the guide were still solid compared to peers (development pipeline +7% yoy, RevPAR/Rooms +4%/~7% in 4Q)."

Barclays analysts added, "Bigger picture, while this print was not as good as HLT (given EBITDA wasn't raised), we see it as good enough versus what we believe were low expectations that were H-specific and considering material share underperformance YTD, especially given 1) Distribution segment now appears de-risked, and 2) U.S. strength appears capable of more than offsetting geopolitical headwinds within international, the two key overhangs for the stock."

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