HST Stock Forecast & Price Target

Host Hotels & Resorts has demonstrated resilience in its financial performance, with comparable hotel portfolio RevPAR experiencing a marginal increase of 0.1% over the previous quarter, reflecting a steady recovery trend. The company's robust average occupancy rate of 74.7% paired with a consistent average room rate of approximately $305 indicates strong demand, especially in urban and resort markets, while management anticipates continued improvement in these metrics moving forward. Additionally, the positive impact of insurance proceeds from the Ritz-Carlton Naples on EBITDA margins, combined with signs of increased group business and food & beverage spending, further reinforces a favorable outlook for Host Hotels & Resorts.

Host Hotels & Resorts has revised its hotel EBITDA margin assumption down to 29.1%-29.6%, reflecting a slight degradation in operational efficiency, evidenced by a 2Q24 comparable hotel EBITDA margin of 32.6%, which shows a decline from the previous year. Additionally, the company reduced its fiscal year 2024 adjusted FFO per share and adjusted EBITDA forecasts, indicating a downward trend in anticipated financial performance amidst rising operational costs. The forecast for comparable hotel RevPAR for FY2024 has also been downgraded to a range of -1% to +1%, which highlights the financial challenges posed by increased wage and insurance expenses, as well as the slower-than-expected recovery from recent wildfires impacting revenue.