Hilton Worldwide PT Raised by RBC

Hilton Worldwide Holdings received a price-target increase Monday from RBC Capital Markets, which cited a combination of multiple expansion and a higher forecast for earnings before interest, taxes, depreciation and amortization. The new price target from RBC is $71 per share, up from $62. In comparison, the stock closed Friday’s session at $64.75, up 15% from three months ago. RBC kept its investment rating on the stock at outperform.”We believe the multiple expansion has been driven by a greater appreciation for the organic growth profile of post-spin HLT and an appreciation for the visibility for growth from a consumer discretionary name,” RBC said in a note to clients. “Moreover, the credit-card fee opportunity is an incremental positive.”

The firm said it believes Hilton is “on track to deliver elevated unit growth in 2017” while it expects modest growth in revenue per available room or RevPAR to “add an extra layer of growth.” It added: “While RevPAR growth has been low, it has stabilized and concerns of a deceleration appear to have abated. Importantly, system-wide growth should remain elevated for the next five years and should be able to offset any potential softness in RevPAR growth.”

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