Hilton Worldwide
HLT
$326.56
+1.01%
Hilton Worldwide Holdings Inc. is a global hospitality company operating 1.38 million rooms across 27 brands spanning the premium economy through luxury segments, with Hampton and Hilton representing 27% and 18% of total rooms respectively as of December 31, 2025. The company's asset-light model, built on managed and franchised properties that generate the vast majority of adjusted EBITDA predominantly from the Americas, distinguishes it as a capital-efficient platform rather than a hotel owner. Recent expansion efforts include new brands such as Spark, Tru, Tempo, LivSmart, and Outset, alongside a partnership with Small Luxury Hotels of the World and acquisitions of NoMad and Graduate Hotels, signaling a strategy to capture demand across price points and travel occasions. The current investor narrative centers on whether the broadening of travel demand beyond high-income consumers is sustainable, a question amplified by Q1 2026 results that showed solid performance and raised guidance, while notable institutional investors like Bill Ackman have rotated out of the name in favor of AI-driven growth stocks.…
HLT
Hilton Worldwide
$326.56
Related headlines
Investment Opinion: Should I buy HLT Today?
Hilton Worldwide Holdings (HLT) earns a Hold rating based on a balanced risk/reward profile. The analyst consensus is 'buy' with an average target of $353, implying 8.1% upside, but the stock trades at a premium valuation (46.5x trailing PE, 31.2x forward PE) that already reflects much of the optimism. The core thesis is that Hilton's asset-light model and strong free cash flow generation ($2.007 billion TTM) support long-term growth, but decelerating revenue growth (6.5% YoY) and negative equity warrant caution.
Supporting evidence for the Hold includes: 1) Revenue growth of 6.5% YoY in Q2 2026, while positive, is a sharp deceleration from 16.3% in the prior year; 2) Net margin improved to 14.4% in Q2 2026 from 14.0% a year ago, and operating margin rose to 25.7% from 24.8%, showing cost control; 3) Free cash flow of $2.007 billion TTM provides ample liquidity for buybacks and dividends, with $966 million returned via buybacks in Q2 2026; 4) The forward PE of 31.23x is above the market average, but the PEG ratio is not meaningful due to negative earnings growth expectations. Compared to industry averages (PS of 2-4x, EV/EBITDA of 10-15x), Hilton's PS of 5.63x and EV/EBITDA of 27.87x are at a premium, justified by superior margins but limiting upside.
The biggest risks that could invalidate the Hold rating include: 1) A continued deceleration in revenue growth below 5%, which could trigger multiple compression; 2) Further institutional rotation out of hospitality stocks, as seen with Bill Ackman's exit; 3) A deterioration in the balance sheet, with negative equity and a current ratio of 0.66. The rating would upgrade to Buy if the stock pulls back to the low $270s (analyst low target) or if revenue growth reaccelerates above 8% with margin expansion. It would downgrade to Sell if revenue growth turns negative or if free cash flow declines significantly. Currently, the stock appears fairly valued to slightly overvalued relative to its growth prospects, trading at a premium to peers and its own history.
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HLT 12-Month Price Forecast
Hilton presents a balanced risk/reward profile, with the bull case supported by its asset-light model, strong free cash flow, and analyst optimism, while the bear case highlights premium valuation, decelerating growth, and negative equity. The stock's 25.55% one-year gain and recent 1-month rally of 6.37% suggest momentum, but the 3-month and 6-month underperformance relative to SPY indicate underlying weakness. The base case (55% probability) targets $340-360, assuming steady growth and no major macro shocks. I would upgrade to bullish if revenue growth reaccelerates above 8% and margins expand, or downgrade to bearish if growth falls below 4% or if free cash flow deteriorates. The key tension is whether the premium multiple can be sustained amid slowing growth, making this a hold for now.
Wall Street consensus
Most Wall Street analysts maintain a constructive view on Hilton Worldwide's 12-month outlook, with a consensus price target around $353.00 and implied upside of +8.1% versus the current price.
Average Target
$353.00
0 analysts
Implied Upside
+8.1%
vs. current price
Analyst Count
—
covering this stock
Price Range
$270 - $394
Analyst target range
Hilton is covered by 26 analysts, with a consensus recommendation of "buy" and an average price target of $353.00. This target implies an upside of approximately 8.1% from the current price of $326.56. The recommendation mean of 1.96 (on a scale where 1 is Strong Buy and 5 is Strong Sell) leans bullish, reflecting generally positive sentiment despite recent mixed performance. The consensus EPS estimate for the upcoming year is $16.67, with a range of $16.19 to $17.19, and estimated revenue averages $17.859 billion, ranging from $17.461 billion to $18.287 billion. The bullish tilt is supported by the asset-light growth story and expectations of continued unit expansion. The target price range spans from a low of $270.00 to a high of $394.00, a wide spread of $124 that signals significant uncertainty among analysts. The high target of $394 assumes robust multiple expansion and accelerating growth, potentially driven by stronger-than-expected travel demand and successful execution of new brand launches. The low target of $270 prices in margin compression, competitive pressures, or a broader economic slowdown that could dampen travel spending. Recent institutional ratings show a mix of Overweight and Neutral actions, with firms like Wells Fargo, Barclays, and JP Morgan maintaining Overweight ratings, while Truist and Susquehanna hold Neutral views. The lack of recent upgrades or downgrades suggests stable sentiment, but the wide target range indicates that conviction is not uniform, and investors should be prepared for volatility around earnings releases and macroeconomic data.
Bulls vs Bears: HLT Investment Factors
The bull case for Hilton rests on its capital-efficient asset-light model, consistent free cash flow generation, and analyst consensus buy rating with 8.1% upside to the average target. However, the bear case is equally compelling: the stock trades at a premium valuation (46.5x trailing PE, 27.9x EV/EBITDA) that assumes continued growth, yet revenue growth has decelerated to 6.5% YoY and institutional investors like Bill Ackman are rotating out. The most important tension is whether Hilton can sustain its premium multiple amid slowing growth and negative equity, or whether multiple compression will drive the stock lower. Currently, the bear evidence appears slightly stronger given the valuation disconnect and decelerating growth, but the company's strong fundamentals and analyst support provide a counterbalance. A resolution of this tension will likely hinge on whether travel demand broadens beyond high-income consumers, as highlighted in Q1 2026 results.
Bullish
- Asset-light model drives high margins: Hilton's managed and franchised properties generate the vast majority of adjusted EBITDA, supporting a 22.4% operating margin and 12.1% net margin, well above typical lodging peers. This capital-efficient structure enables robust free cash flow of $2.007 billion TTM, funding $966 million in buybacks in Q2 2026 alone.
- Consistent revenue growth and raised guidance: Q2 2026 revenue grew 6.5% YoY to $3.341 billion, with net income up 9.5% to $482 million. Management raised full-year guidance following Q1 2026 results, signaling confidence in sustained demand despite macro uncertainty.
- Analyst consensus buy with 8.1% upside: 26 analysts rate HLT a 'buy' with an average target of $353, implying 8.1% upside from $326.56. The high target of $394 suggests 20.7% upside if growth accelerates, reflecting optimism around unit expansion and new brand launches.
- Strong relative performance vs. market: HLT has gained 25.55% over the past year, outperforming SPY's 16.00% by 9.55 percentage points. The 1-month change of +6.37% also beats SPY's +2.12%, indicating renewed momentum after a 3-month pullback.
Bearish
- Premium valuation vulnerable to compression: Trailing PE of 46.48x and forward PE of 31.23x are elevated versus historical averages and the broader market. EV/EBITDA of 27.87x and PS of 5.63x are well above typical lodging sector ranges of 10-15x and 2-4x, respectively, leaving little room for error.
- Decelerating revenue growth: Q2 2026 revenue growth of 6.5% YoY marks a sharp deceleration from approximately 16.3% in Q2 2025. This slowdown suggests the post-pandemic travel recovery is maturing, making future growth more dependent on unit expansion and pricing power.
- Negative equity and high leverage: Aggressive share repurchases have resulted in negative shareholders' equity, with a debt-to-equity ratio of -2.43 and a current ratio of 0.66. While buybacks support EPS, the balance sheet offers limited cushion in a downturn.
- Institutional rotation out of HLT: Bill Ackman's Pershing Square dumped its Hilton stake in favor of AI-driven growth stocks like Meta, signaling a shift in institutional preference away from traditional hospitality names. This rotation could pressure the stock if it continues.
HLT Technical Analysis
Hilton is in a sustained but choppy uptrend, with the current price of $326.56 sitting at approximately 69.9% of its 52-week range (low of $253.54, high of $358.00) and up 25.55% over the past year. This positioning suggests the stock retains positive momentum but is not overextended near its highs, leaving room for further appreciation before hitting resistance. The 1-year gain of 25.55% compares favorably to SPY's 16.00% over the same period, reflecting a relative strength of 9.55 percentage points and confirming Hilton's leadership within the consumer cyclical space. However, the stock has pulled back from its 52-week high of $358.00, indicating that momentum has cooled from its peak. Recent momentum is mixed: the 1-month change of +6.37% is strong and exceeds SPY's +2.12% by a relative strength of 4.25 percentage points, but the 3-month change of -2.66% lags SPY's +3.13% by a relative strength of -5.79 percentage points. This divergence between the positive 1-month and negative 3-month trends suggests a potential trend reversal or mean reversion after a period of underperformance, with the recent rally possibly signaling renewed buying interest. The 6-month change of +0.97% is modest and trails SPY's +14.59% by a wide margin (relative strength of -13.62 percentage points), highlighting that Hilton's intermediate-term performance has been lackluster despite the strong 1-year figure. Key technical levels to watch include support at the 52-week low of $253.54 and resistance at the 52-week high of $358.00; a breakout above $358 would signal renewed bullish momentum and potentially open the door to new highs, while a breakdown below $253.54 could indicate a deeper correction. The stock's beta of 1.105 means it is approximately 10.5% more volatile than the broader market, which is relatively moderate for an individual equity and suggests that position sizing should account for slightly higher risk than an index fund. The maximum drawdown of -13.61% over the observed period reflects a moderate peak-to-trough decline, consistent with a stock that experiences periodic pullbacks within a longer-term uptrend.
Beta
1.10
1.10x market volatility
Max Drawdown
-13.6%
Largest decline past year
52-Week Range
$254-$358
Price range past year
Annual Return
+25.6%
Cumulative gain past year
| Period | HLT Return | S&P 500 |
|---|---|---|
| 1m | +6.4% | +1.9% |
| 3m | -2.7% | +3.9% |
| 6m | +1.0% | +12.1% |
| 1y | +25.6% | +19.2% |
| ytd | +11.5% | +14.2% |
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HLT Fundamental Analysis
Hilton's revenue trajectory remains positive but is decelerating, with Q2 2026 revenue of $3.341 billion representing 6.5% year-over-year growth from $3.137 billion in Q2 2025. Sequentially, revenue increased from $2.937 billion in Q1 2026, showing a typical seasonal uptick, but the YoY growth rate of 6.5% is modest compared to the prior year's Q2 2025 growth of approximately 16.3% over Q2 2024. The revenue mix is heavily weighted toward reimbursement revenue of $1.982 billion, which is largely pass-through and lower-margin, while the higher-margin management and franchise segment contributes $808 million. The growth trend implies a maturing recovery in the travel sector, with future gains likely dependent on unit expansion and pricing power rather than a broad cyclical rebound. Profitability remains solid, with Q2 2026 net income of $482 million and a net margin of 14.4%, up from $440 million and 14.0% in Q2 2025. The gross margin of 30.5% in Q2 2026 is consistent with the prior year's 30.5%, though it is lower than the 40.2% reported in Q1 2026 due to seasonality and cost structure variations. Operating margin stood at 25.7% in Q2 2026, an improvement from 24.8% in Q2 2025, indicating effective cost management and operating leverage. The company's asset-light model supports high margins relative to the broader hospitality industry, where many competitors own real estate and carry heavier depreciation burdens. The balance sheet shows a negative debt-to-equity ratio of -2.43, a consequence of negative shareholders' equity from aggressive share repurchases, which totaled $966 million in Q2 2026 alone. Free cash flow remains robust at $2.007 billion on a trailing twelve-month basis, providing ample liquidity to fund buybacks and dividends despite a current ratio of 0.66, which is below 1.0 and indicates potential short-term liquidity tightness. The ROE of -27.0% is distorted by negative equity and should not be interpreted as a sign of poor profitability; instead, the ROA of 11.0% reflects efficient asset utilization. The company's ability to generate significant free cash flow while returning capital to shareholders underscores its financial health, though the reliance on debt and negative equity warrants monitoring.
Quarterly Revenue
$3.3B
2026-06
Revenue YoY Growth
+6.5%
YoY Comparison
Gross Margin
30.5%
Latest Quarter
Free Cash Flow
$2.0B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
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Valuation Analysis: Is HLT Overvalued?
Since Hilton's net income is positive, the PE ratio is the primary valuation metric. The trailing PE of 46.48x is elevated, while the forward PE of 31.23x is significantly lower, implying that the market expects substantial earnings growth in the coming year. This gap between trailing and forward multiples suggests that analysts anticipate EPS expansion, likely driven by continued unit growth, margin improvement, and share repurchases reducing the share count. The forward PE of 31.23x is still above the broader market average, reflecting a premium for Hilton's asset-light model and brand strength. Comparing Hilton's valuation to the industry, the PS ratio of 5.63x and EV/EBITDA of 27.87x are both at premium levels relative to typical lodging sector averages, which often range between 2-4x for PS and 10-15x for EV/EBITDA. The premium is justified by Hilton's superior profitability, with a net margin of 12.1% and operating margin of 22.4%, which exceed many peers. However, the PEG ratio of -144.09 is not meaningful due to negative earnings growth expectations in the calculation, highlighting the limitations of this metric in the current context. The dividend yield is minimal at 0.21%, indicating that Hilton prioritizes growth and buybacks over income. Historically, Hilton's PE ratio has ranged from the low 20s to the 50s over the past few years, with the current trailing PE of 46.48x near the upper end of that band. The PS ratio of 5.63x is also above the historical average, though it has been higher in periods of depressed earnings. This suggests that the market is pricing in optimistic expectations for future growth, and any disappointment could lead to multiple compression. The forward PE of 31.23x, while lower, still represents a premium to the market and to Hilton's own historical average, indicating that the stock is not cheap on a forward basis either.
PE
46.5x
Latest Quarter
vs. Historical
Mid-Range
5-Year PE Range 21x~74x
vs. Industry Avg
N/A
Industry PE ~N/A*
EV/EBITDA
27.9x
Enterprise Value Multiple
Investment Risk Disclosure
Hilton faces financial risks stemming from its negative shareholders' equity and high leverage, with a debt-to-equity ratio of -2.43 and a current ratio of 0.66, indicating potential short-term liquidity tightness. The company's aggressive share repurchases, totaling $966 million in Q2 2026 alone, have depleted equity and increased reliance on debt, leaving limited buffer if cash flows decline. Additionally, revenue growth has decelerated to 6.5% YoY in Q2 2026 from approximately 16.3% in the prior year, and the revenue mix is heavily weighted toward lower-margin reimbursement revenue ($1.982 billion), which could pressure profitability if cost inflation persists. While free cash flow remains robust at $2.007 billion TTM, any downturn in travel demand could quickly erode this cushion.
Market and competitive risks include Hilton's premium valuation, with a trailing PE of 46.48x and EV/EBITDA of 27.87x, both well above historical and sector averages. This leaves the stock vulnerable to multiple compression if growth disappoints or if interest rates remain elevated, as higher discount rates disproportionately impact high-multiple stocks. The beta of 1.105 indicates Hilton is about 10.5% more volatile than the market, amplifying downside during selloffs. Competitive pressures from alternative accommodations like Airbnb and other hotel chains could erode market share, while regulatory risks in key markets and macroeconomic sensitivity to travel spending pose ongoing threats. Recent news of Bill Ackman's exit from Hilton in favor of AI stocks highlights shifting institutional sentiment that could weigh on the stock.
In a worst-case scenario, a global recession or a significant slowdown in travel demand could trigger a sharp decline in revenue and earnings, leading to multiple compression. The stock could fall to its 52-week low of $253.54, representing a 22.4% decline from the current price of $326.56. If analyst bear-case targets are met, the low target of $270 implies a 17.3% downside. A more severe scenario, such as a prolonged downturn or operational missteps, could push the stock below $250, a 23.5% loss. Given the maximum drawdown of -13.61% observed in the past period, a 20-25% decline is plausible in a bear market, wiping out a significant portion of recent gains.
FAQ
The key risks include: 1) Valuation risk: the premium multiple (46.5x trailing PE) could compress if growth slows, leading to a 20-25% decline to the 52-week low of $253.54. 2) Financial risk: negative shareholders' equity and a current ratio of 0.66 indicate limited liquidity buffer, with debt-to-equity at -2.43. 3) Growth risk: revenue growth has decelerated to 6.5% YoY from 16.3%, and further slowdown could disappoint investors. 4) Competitive and macro risk: competition from alternative accommodations and sensitivity to economic cycles, with a beta of 1.105 amplifying market downturns. These risks are ranked from highest to lowest severity, with valuation and growth risks being the most immediate.
The 12-month forecast for Hilton is based on three scenarios: bull case (25% probability) targets $380-394, driven by accelerating growth and multiple expansion; base case (55% probability) targets $340-360, assuming steady mid-single-digit revenue growth and stable margins; bear case (20% probability) targets $253-270, reflecting a recession or significant multiple compression. The base case is most likely, with the key assumption that revenue grows 5-7% YoY and operating margins remain around 25%. This aligns with the analyst average target of $353. The wide range of analyst targets ($270-$394) underscores the uncertainty, and investors should watch for Q3 2026 earnings to gauge the trajectory.
Hilton appears overvalued on most metrics. Its trailing PE of 46.48x and forward PE of 31.23x are above the broader market and its own historical average, which has ranged from the low 20s to 50s. The PS ratio of 5.63x and EV/EBITDA of 27.87x are also at a premium to typical lodging sector averages of 2-4x and 10-15x, respectively. This premium is justified by Hilton's superior margins and asset-light model, but it leaves little room for error. The market is pricing in significant future growth, and any disappointment could lead to multiple compression. Compared to peers, Hilton is among the most expensive, suggesting it is overvalued relative to its growth prospects.
Hilton is a good buy for long-term investors who believe in the resilience of the travel industry and the company's asset-light growth strategy. The stock has a consensus buy rating from 26 analysts with an average target of $353, implying 8.1% upside from the current price of $326.56. However, the premium valuation (46.5x trailing PE) and decelerating revenue growth (6.5% YoY) suggest limited near-term upside, and the downside risk to the 52-week low of $253.54 is 22.4%. Therefore, it may be more suitable for investors with a long time horizon who can tolerate volatility, rather than those seeking quick gains. A pullback to the $270-280 range would improve the risk/reward profile.
Hilton is more suitable for long-term investment due to its asset-light growth story, consistent free cash flow, and brand strength, which are best realized over multiple years. The stock's beta of 1.105 and maximum drawdown of -13.61% indicate moderate volatility, making it less ideal for short-term trading unless one can actively manage risk. The minimal dividend yield of 0.21% means income is not a primary return driver, so total return depends on capital appreciation. A suggested minimum holding period is 2-3 years to ride out economic cycles and benefit from unit expansion and share buybacks. Short-term traders might find opportunities around earnings releases, but the premium valuation increases the risk of sharp corrections.