It's been a good week for Hyatt Hotels Corporation (NYSE:H) shareholders, because the company has just released its latest annual results, and the shares gained 5.6% to US$92.86. It looks like a credible result overall - although revenues of US$5.0b were what analysts expected, Hyatt Hotels surprised by delivering a (statutory) profit of US$7.21 per share, an impressive 69% above what analysts had forecast. Earnings are an important time for investors, as they can track a company's performance, look at what top analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. With this in mind, we've gathered the latest statutory forecasts to see what analysts are expecting for next year.
Following last week's earnings report, Hyatt Hotels's eleven analysts are forecasting 2020 revenues to be US$4.97b, approximately in line with the last 12 months. Statutory earnings per share are forecast to dive 76% to US$1.75 in the same period. Yet prior to the latest earnings, analysts had been forecasting revenues of US$4.96b and earnings per share (EPS) of US$1.78 in 2020. So it's pretty clear that, although analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.
There were no changes to revenue or earnings estimates or the price target of US$88.69, suggesting that the company has met expectations in its recent result. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Hyatt Hotels, with the most bullish analyst valuing it at US$100.00 and the most bearish at US$72.00 per share. This shows there is still quite a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.
Further, we can compare these estimates to past performance, and see how Hyatt Hotels forecasts compare to the wider market's forecast performance. These estimates imply that sales are expected to slow, with a forecast revenue decline of 1.1% a significant reduction from annual growth of 4.0% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same market are forecast to see their revenue grow 7.7% annually for the foreseeable future. It's pretty clear that Hyatt Hotels's revenues are expected to perform substantially worse than the wider market.
The Bottom Line
The most obvious conclusion from these results is that there's been no major change in the business' prospects in recent times, with analysts holding earnings per share steady, in line with previous estimates. Fortunately, analysts also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations - although our data does suggest that Hyatt Hotels's revenues are expected to perform worse than the wider market. The consensus price target held steady at US$88.69, with the latest estimates not enough to have an impact on analysts' estimated valuations.
Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. At Simply Wall St, we have a full range of analyst estimates for Hyatt Hotels going out to 2023, and you can see them free on our platform here..
It might also be worth considering whether Hyatt Hotels's debt load is appropriate, using our debt analysis tools on the Simply Wall St platform, here.
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