Park Hotels & Resorts
PK
$14.88
+1.92%
Park Hotels & Resorts is a real estate investment trust (REIT) that owns upper-upscale and luxury hotels, primarily under the Hilton brand, with 20,467 rooms across 31 properties in the United States. Spun out of Hilton Worldwide in 2017, the company has strategically divested international and lower-quality domestic assets to focus on high-quality hotels in key U.S. gateway markets. The current investor narrative centers on the company's ongoing portfolio transformation and its ability to drive revenue growth and margin expansion amid a recovering travel demand environment, with recent quarterly results showing a return to profitability after several quarters of losses.…
PK
Park Hotels & Resorts
$14.88
Investment Opinion: Should I buy PK Today?
Rating: Hold. The thesis is that Park Hotels is a recovering hotel REIT with improving profitability but lacking revenue growth, making it a hold for investors seeking exposure to the travel recovery without excessive risk. The consensus analyst rating is 'hold' with an average price target of $14.44, implying a 3.0% downside from the current price of $14.88.
Supporting evidence: The forward P/E of 27.94 is elevated but justified by the low PEG ratio of 0.03, suggesting high expected earnings growth. Revenue is flat to slightly declining (-1.3% YoY), but the company returned to profitability with a net margin of 1.8%. Free cash flow turned negative at -$24 million in Q1 2026, a concern. The price-to-sales ratio of 0.82 is below historical averages, indicating potential value. The analyst high target of $20.00 implies 34.4% upside, but the low target of $10.50 suggests 29.4% downside, reflecting high uncertainty.
Risks & Conditions: The biggest risks are a reversal in profitability, negative free cash flow persisting, and a downturn in travel demand. This Hold would upgrade to Buy if the company reports positive free cash flow and revenue growth above 2% YoY, or downgrade to Sell if net income turns negative again. Valuation verdict: The stock appears fairly valued relative to its forward P/E of 27.94 and PEG of 0.03, but the lack of revenue growth and negative free cash flow warrant caution.
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PK 12-Month Price Forecast
The outlook for Park Hotels over the next 12 months is neutral. The company has returned to profitability, but the lack of revenue growth and negative free cash flow are concerning. The stock's valuation (forward P/E 27.94) is not cheap, but the low PEG ratio suggests growth expectations are high. The base case of flat revenue and stable margins is most likely, with the stock trading near the analyst average target. Upside catalysts include stronger-than-expected travel demand and margin expansion, while downside risks include a recession or operational missteps. The stance would upgrade to bullish if revenue growth accelerates above 3% and free cash flow turns positive, and downgrade to bearish if the company reports a net loss again.
Wall Street consensus
Most Wall Street analysts maintain a constructive view on Park Hotels & Resorts's 12-month outlook, with a consensus price target around $14.47 and implied upside of -2.8% versus the current price.
Average Target
$14.47
0 analysts
Implied Upside
-2.8%
vs. current price
Analyst Count
—
covering this stock
Price Range
$11 - $20
Analyst target range
Park Hotels is covered by 16 analysts, with a consensus recommendation of 'hold' (mean rating 2.72 on a 1-5 scale). The average price target is $14.44, implying a 3.0% downside from the current price of $14.88. The distribution leans neutral, with no strong bullish or bearish bias. The target range spans from a low of $10.50 to a high of $20.00. The high target of $20.00 assumes significant multiple expansion or accelerated growth, while the low target of $10.50 implies potential margin compression or a downturn in travel demand. Recent ratings from firms like Wells Fargo and Barclays have maintained 'Equal Weight' stances, while Ladenburg Thalmann reiterated a 'Buy' rating. The wide spread between the low and high targets ($9.50) indicates high uncertainty among analysts, which is typical for a cyclical REIT. The lack of recent upgrades or downgrades suggests the stock is in a wait-and-see period.
Bulls vs Bears: PK Investment Factors
Park Hotels presents a mixed picture: the return to profitability and strong stock momentum are encouraging, but the revenue decline, thin margins, and negative free cash flow highlight ongoing challenges. The bull case rests on continued margin improvement and portfolio transformation driving earnings growth, while the bear case centers on fragile profitability and lack of revenue growth. Currently, the evidence slightly favors the bear case due to the fundamental weakness in revenue and cash flow, but the low PEG ratio and analyst targets suggest potential upside if the company can sustain its earnings recovery. The key tension is whether the company can translate its portfolio transformation into consistent revenue growth and margin expansion, which would validate the current valuation.
Bullish
- Return to profitability in Q1 2026: Park Hotels reported net income of $11 million in Q1 2026, a significant turnaround from a net loss of $205 million in Q4 2025 and a loss of $57 million in Q1 2025. This demonstrates the company's ability to improve operational efficiency and benefit from recovering travel demand.
- Strong price momentum and near 52-week high: The stock is up 37.8% over the past year and currently trades at $14.88, just 0.5% below its 52-week high of $14.95. This reflects strong bullish sentiment and market confidence in the company's recovery trajectory.
- Low PEG ratio suggests undervaluation: With a PEG ratio of 0.03, the stock appears cheap relative to its expected earnings growth. This implies that the market may not be fully pricing in the potential for earnings expansion as the company continues to improve margins.
- Portfolio transformation focused on high-quality assets: The company has strategically divested international and lower-quality domestic assets to concentrate on upper-upscale and luxury hotels in key U.S. gateway markets. This focus should enhance revenue per available room (RevPAR) and operating margins over time.
Bearish
- Revenue decline in Q1 2026: Revenue fell 1.3% year-over-year to $622 million in Q1 2026, following a trend of modest declines from $672 million in Q2 2025. This lack of top-line growth raises concerns about the company's ability to expand in a competitive hotel market.
- Thin net margin and fragile profitability: The net margin of 1.8% in Q1 2026 is positive but very thin, indicating that profitability is highly sensitive to operating leverage. Any downturn in occupancy or room rates could quickly push the company back into losses.
- Negative free cash flow in Q1 2026: Free cash flow was -$24 million in Q1 2026, down from $31 million in Q3 2025. This negative cash flow may force the company to rely on external financing or asset sales to fund operations and dividends, increasing financial risk.
- High debt-to-equity ratio of 1.36: With a debt-to-equity ratio of 1.36, the company carries moderate leverage. Combined with negative free cash flow, this could strain the balance sheet if interest rates remain elevated or if revenue growth does not materialize.
PK Technical Analysis
Park Hotels & Resorts is in a sustained uptrend, with the stock price up 37.8% over the past year. The current price of $14.88 sits at 99.5% of its 52-week range ($9.84–$14.95), indicating the stock is near its highs and reflecting strong bullish momentum. This positioning suggests the market is pricing in continued positive sentiment, though it also raises the risk of overextension in the near term. Short-term momentum is accelerating, with the stock gaining 2.6% over the past month and 30.4% over the past three months. The 1-month change of 2.6% aligns with the longer-term uptrend, showing no divergence, and the relative strength versus the S&P 500 (1-month relative strength of 2.31) confirms outperformance. The stock's beta of 1.331 indicates it is 33% more volatile than the market, amplifying both upside and downside moves. Key support lies near the 52-week low of $9.84, while resistance is at the 52-week high of $14.95. A breakout above $14.95 would signal a continuation of the uptrend, while a breakdown below $9.84 could indicate a trend reversal. The elevated beta suggests investors should size positions accordingly to manage risk.
Beta
1.33
1.33x market volatility
Max Drawdown
-18.9%
Largest decline past year
52-Week Range
$10-$15
Price range past year
Annual Return
+37.8%
Cumulative gain past year
| Period | PK Return | S&P 500 |
|---|---|---|
| 1m | +2.6% | -0.5% |
| 3m | +30.4% | +4.9% |
| 6m | +30.3% | +9.7% |
| 1y | +37.8% | +18.4% |
| ytd | +38.2% | +9.0% |
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PK Fundamental Analysis
Revenue in the most recent quarter (Q1 2026) was $622 million, down 1.3% year-over-year, following a trend of modest declines from $672 million in Q2 2025 and $630 million in Q1 2025. The revenue trajectory is essentially flat to slightly declining, with occupancy revenue of $356 million and food and beverage of $182 million being the primary drivers. The lack of growth raises questions about the company's ability to expand in a competitive hotel market. The company returned to profitability in Q1 2026 with net income of $11 million, compared to a net loss of $205 million in Q4 2025 and a loss of $57 million in Q1 2025. Gross margin improved to 7.4% from negative territory in Q4 2025, but remains well below the 31.5% gross margin seen in Q2 2025. The net margin of 1.8% is positive but thin, indicating that profitability is fragile and highly sensitive to operating leverage. Park Hotels has a debt-to-equity ratio of 1.36, indicating moderate leverage, and generated free cash flow of -$24 million in Q1 2026, down from $31 million in Q3 2025. The company had $190 million in cash at the end of Q1 2026, providing some liquidity, but the negative free cash flow suggests it may need to rely on external financing or asset sales to fund operations and dividends. The ROE of -9.0% reflects ongoing challenges in generating shareholder returns.
Quarterly Revenue
$622000000.0B
2026-03
Revenue YoY Growth
-1.3%
YoY Comparison
Gross Margin
7.4%
Latest Quarter
Free Cash Flow
$69000000.0B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
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Valuation Analysis: Is PK Overvalued?
Since net income is positive (TTM net income of $11 million), the trailing P/E ratio is the primary valuation metric. The trailing P/E is -7.37 (negative due to prior losses), but the forward P/E is 27.94, implying the market expects earnings to improve significantly. The gap between trailing and forward P/E reflects expectations of a sharp earnings recovery. Compared to the industry average P/E (not provided), the stock's forward P/E of 27.94 appears elevated, but the PEG ratio of 0.03 suggests the stock is cheap relative to expected earnings growth. The price-to-sales ratio of 0.82 is below the historical average, indicating potential value. Historically, the trailing P/E has ranged from -34.6 to 52.3 over the past two years. The current forward P/E of 27.94 is near the middle of that range, suggesting the market is pricing in moderate optimism. The price-to-book ratio of 0.66 is near the low end of its historical range (0.58–1.06), which could indicate undervaluation or reflect the company's asset-heavy nature and low ROE.
PE
-7.4x
Latest Quarter
vs. Historical
Low-End
5-Year PE Range 4x~34x
vs. Industry Avg
N/A
Industry PE ~N/A*
EV/EBITDA
18.3x
Enterprise Value Multiple
Investment Risk Disclosure
Financial & Operational Risks: Park Hotels' primary financial risk is its fragile profitability and negative free cash flow. The net margin of 1.8% in Q1 2026 is razor-thin, meaning any operational hiccup could push the company back into losses. The debt-to-equity ratio of 1.36 indicates moderate leverage, and with negative free cash flow of -$24 million in Q1 2026, the company may need to rely on external financing or asset sales to meet obligations. Additionally, revenue declined 1.3% year-over-year, signaling a lack of top-line growth that could pressure margins further if costs remain sticky.
Market & Competitive Risks: The stock's beta of 1.331 makes it 33% more volatile than the market, amplifying downside risk during economic downturns. As a hotel REIT, Park is highly sensitive to travel demand, which could be impacted by a recession or geopolitical events. The stock trades near its 52-week high, leaving limited upside from current levels if sentiment shifts. The consensus analyst rating is 'hold' with an average target of $14.44, implying a 3.0% downside from the current price of $14.88, suggesting limited near-term upside potential.
Worst-Case Scenario: In a severe downturn, travel demand could collapse, leading to occupancy declines and margin compression. The 52-week low of $9.84 represents a potential 33.9% downside from the current price of $14.88. If the company reports another quarter of losses or negative free cash flow, the stock could revisit that level. The analyst low target of $10.50 implies a 29.4% downside, consistent with this scenario.
FAQ
The key risks are: 1) Financial risk: negative free cash flow of -$24 million in Q1 2026 and a debt-to-equity ratio of 1.36 could strain the balance sheet if interest rates remain high. 2) Operational risk: revenue declined 1.3% YoY and net margin is only 1.8%, making profitability fragile. 3) Macro risk: the stock's beta of 1.331 makes it highly sensitive to economic downturns, and a recession could severely impact travel demand. 4) Valuation risk: the forward P/E of 27.94 leaves little room for error; if earnings disappoint, the stock could fall to the 52-week low of $9.84, a 33.9% downside. The most severe risk is a combination of these factors leading to a return to losses and a dividend cut.
The 12-month forecast for Park Hotels is neutral with a base case target range of $13.00 to $15.50 (50% probability), aligning with the analyst average of $14.44. The bull case (25% probability) targets $17.00 to $20.00, driven by stronger-than-expected travel demand and margin expansion. The bear case (25% probability) targets $9.84 to $11.00, reflecting a downturn in travel or operational missteps. The most likely scenario is that revenue remains flat, margins stabilize, and the stock trades near current levels. Key assumptions include no major recession and continued improvement in occupancy rates. The stock's high beta and low PEG ratio suggest it could be volatile, but the base case offers limited upside from current prices.
Park Hotels appears fairly valued to slightly overvalued based on its forward P/E of 27.94, which is elevated compared to the broader market but justified by the low PEG ratio of 0.03. The price-to-sales ratio of 0.82 is below historical averages, suggesting potential value. The price-to-book ratio of 0.66 is near the low end of its historical range (0.58–1.06), which could indicate undervaluation or reflect the company's asset-heavy nature and low ROE of -9.0%. The analyst average target of $14.44 implies a 3.0% downside from the current price of $14.88, suggesting the stock is fairly valued. Overall, the market is pricing in moderate optimism about earnings recovery, but the lack of revenue growth and negative free cash flow warrant caution.
Park Hotels is a hold rather than a buy at current levels. The stock has strong momentum, up 37.8% over the past year, and trades near its 52-week high of $14.95. However, the analyst consensus is 'hold' with an average target of $14.44, implying a 3.0% downside. The company returned to profitability in Q1 2026 with net income of $11 million, but revenue declined 1.3% YoY and free cash flow was negative. The forward P/E of 27.94 is elevated, but the PEG ratio of 0.03 suggests it is cheap relative to expected earnings growth. For investors with a high risk tolerance and a bullish view on travel demand, it could be a speculative buy, but the lack of revenue growth and negative free cash flow make it a risky investment. A better entry point would be if the stock pulls back to the $13 level or if the company reports a quarter with positive revenue growth.
Park Hotels is more suitable for short-term to medium-term trading rather than long-term holding. The stock's beta of 1.331 indicates high volatility, making it attractive for traders who can capitalize on price swings. The company's dividend yield of 13.45% is high, but the payout ratio of -0.99 (negative due to losses) suggests the dividend may not be sustainable. The lack of consistent revenue growth and negative free cash flow make it a risky long-term hold. For long-term investors, a minimum holding period of 3-5 years would be needed to see the benefits of portfolio transformation, but the cyclical nature of the hotel industry adds uncertainty. Short-term traders could look for momentum plays near the 52-week high, but should set stop-losses to manage downside risk.