Valens Equity Weekly Insights - 2024 01 30
Hyatt Hotels Corporation (H) is positioned to survive and thrive post-pandemic, and it's starting to show signs that it is executing on its long-term transformational goals. Uniform Accounting confirms that the market is not pricing in the full force of this transformation, suggesting equity upside continues to be warrantedBefore the pandemic, Hyatt began transforming its business model to focus on a franchise model, similar to what hotel giants Hilton and Marriott have already done. The pandemic has made Hyatt's transformation harder to see, but the company's well capitalized balance sheet has allowed it to survive and strengthen its position exiting the pandemic. As it continues executing on its franchise strategy, the company has the ability to accelerate Uniform ROA far higher than the market is pricing in
Hyatt's management is closely aligned to focus on growth and improving profitability, two key drivers for upside
Management confidence about the recovery of the hotel industry and growth of its ALG properties suggest further reason for ROA expansion
H
Hyatt Hotels is a hospitality company engaged in the development, ownership, operation, management, franchising, licensing or provision of services to a portfolio of properties, consisting of full service hotels, select service hotels, resorts, and other properties, including spas and fitness studios, timeshare, fractional, and other forms of residential and vacation properties. The company also manages, provides services to, or licenses its trademarks with respect to residential ownership units that are often adjacent to a Hyatt-branded hotel. Additionally, for condominium ownership units, the company provides services and/or manage the rental programs or homeowner associations associated with such units.
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- GAAP and IFRS have failed to provide rules for reliable financial statement reporting
- Stock analyst recommendations are not grounded in disciplined financial analysis
- Credit agencies have been set up to grossly fail in their responsibilities to investors and the public markets
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- The governing accounting bodies have created more leeway for mis-estimates and mis-classifications as financials have become unwieldy and overwhelming
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