Is Host Hotels & Resorts (HST) Still Undervalued Following Its Recent Share Price Run?
Host Hotels & Resorts (HST) drew fresh attention after its recent share move, with the stock closing at US$23.22. Investors are weighing that price against mixed annual revenue and net income trends.
Over the past year, Host Hotels & Resorts has seen a strong 27.86% year to date share price return and a 53.03% total shareholder return. The recent 2.11% one day and 4.41% one month share price gains suggest momentum has been building rather than fading.
Scan how Host Hotels & Resorts compares with other lodging and real estate picks on our hand built list of list of solid balance sheet and fundamentals (25 results)
The recent run in Host Hotels & Resorts puts momentum on your side today, but mixed revenue and earnings trends may argue for patience. Does the current valuation already reflect that trade off, or is there still a cushion?
Most Popular Narrative: 8% Undervalued
On the most followed view, Host Hotels & Resorts carries a fair value estimate of $25.29 against the latest close at $23.22. This frames the recent rally as only part of the story rather than the full rerating.
The company's focus on upgrading and repositioning premium assets through large renovation and development programs has moved forward, with approximately $2.1b committed across 34 hotels and 21 stabilized properties already showing close to a 9 point RevPAR index share gain. This points to further RevPAR led earnings and margin contribution as remaining projects complete.
See why 14 investors see Host Hotels & Resorts as 8% undervalued.
Result: Fair Value of $25.29 (UNDERVALUED)
Still, the Host Hotels & Resorts story can crack if business travel stays soft or if that US$2.1b renovation pipeline delivers weaker EBITDA than hoped.
Find out about the key risks to this Host Hotels & Resorts narrative.
Another View: Host Hotels & Resorts Through The Earnings Lens
Our DCF work sees Host Hotels & Resorts as undervalued, yet the market is not giving it away. The stock trades on a P/E of 15.5x, richer than the global Hotel and Resort REITs group at 12.3x, but below a fair ratio of 27.1x. That gap points to potential upside, but also raises the question of how much earnings risk you are really comfortable underwriting.
For a closer look at how this price compares with sector peers and where the fair ratio sits, See what the numbers say about this price — find out in our valuation breakdown.
Next Steps
Mixed messages on Host Hotels & Resorts so far, right, with enthusiasm on valuation but clear questions on risk and reward. Take a moment to weigh the full picture for yourself by looking through 2 key rewards and 4 important warning signs.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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