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Price: $373.23
Discount category: Far above intrinsic value
Next earnings: 2027-02-10
Next earnings is estimate: Yes
Company name: Hilton Worldwide
Sector: Hotels
About: Hilton Worldwide is one of the largest hotel companies in the world. At September 30, 2026, it had 9,620 properties with 1,408,417 rooms in 144 countries and territories. Its brands include Waldorf Astoria, Conrad, LXR, Curio Collection, DoubleTree, Canopy, Spark and timeshare brands. Most of its profit comes from management and franchise fees: in Q3 2026, this segment gave $1,012 million of the $1,053 million of segment adjusted EBITDA. The Hilton Honors loyalty program had 270 million members. The head office is in McLean, Virginia, and Christopher J. Nassetta is its president and chief executive officer. Its shares moved from the New York Stock Exchange to Nasdaq on November 5, 2026, with the same ticker.
Thesis: Hilton trades at a premium because investors pay for a fee business that needs little capital, a large pipeline of new hotels and steady buybacks. Management and franchise fee revenues rose 9.5% in Q3 2026, and the pipeline had 543,100 rooms at September 30, 2026. Net unit growth was 6.0% in the year to that date, and Hilton expects to return about $3.5 billion to shareholders in 2026. For the premium to be earned, three things must be true. Net unit growth must stay near the 6.0% to 7.0% that the company guides for 2026. RevPAR must keep rising: it rose 5.8% in Q3 2026 with help from the World Cup, but the company expects only 3.0% to 3.5% in Q4 2026 because of the midterm elections and the Middle East. Fees and buybacks must lift adjusted EPS, which the company expects at $9.07 to $9.13 for 2026, against $8.11 in 2025. The Q4 2026 report with the 2027 outlook, expected in February 2027, is the next test. A weak travel market or slower hotel openings can shrink the premium.
Risks: RevPAR depends on travel demand and the economy. The company expects slower RevPAR growth in Q4 2026 because of the midterm elections and the Middle East, and it lowered its expectations for the Middle East in its 2026 outlook. Hilton had $13.5 billion of debt, including finance leases, and a total deficit of $6.56 billion at September 30, 2026. Higher interest rates or weaker fees can limit buybacks. Growth depends on hotel owners who build and convert hotels. Higher construction costs or tighter loans for owners can slow openings and net unit growth. Reservation channels outside Hilton's own system, such as online travel agencies, compete for guests and can raise the cost of each booking. Hilton operates in many countries. Geopolitical conflicts, travel barriers, tariffs and currency changes can lower results outside the United States.
Balance sheet: Cash: $774M Debt: $13.1B Net debt: $12.3B Interest cover: 4.6× Undrawn credit line: $1.9B, to March 2031 Debt due within 12 months: $600M Hilton funds itself mainly with senior unsecured notes and secured term loans. At September 30, 2026, debt was $13.5 billion with a weighted average interest rate of 5.09%. Without finance lease liabilities, debt was $13.1 billion at 5.10%. Only the $600 million of 4.875% senior notes due in April 2027 mature before April 2029. Cash was $774 million, plus $56 million of restricted cash. The revolving credit facility had no borrowings and $1,894 million of available capacity, and Hilton expects it to mature in March 2031. In May 2026, Hilton issued $1.0 billion of 5.500% senior notes due 2031. Interest cover is operating income divided by interest expense for the first nine months of 2026 ($2,445 million against $529 million). The total deficit was $6.56 billion. In the first nine months of 2026, Hilton paid $103 million of dividends at $0.15 per share each quarter and bought back 8.2 million shares. There were 222.5 million shares outstanding on October 22, 2026. As of 2026-09-30.
Checkpoints: Oct 27, 2026: Q3 2026 results and 2026 outlook. Passed. Watch: RevPAR growth and a kept or higher 2026 outlook pass; a lower outlook fails. Outcome: RevPAR rose 5.8%, and Hilton raised its 2026 RevPAR outlook to 4.0% to 4.5% and its adjusted EBITDA outlook to $4,060 million to $4,080 million. Feb 10, 2027 (estimate): Q4 2026 results and 2027 outlook. Pending. Watch: Net unit growth near 6% to 7% and 2027 guidance for higher adjusted EPS pass; lower unit growth or flat EPS guidance fail. Apr 2027 (estimate): Q1 2027 results: RevPAR and openings. Pending. Watch: Positive RevPAR and net unit growth of 6% or more pass; falling RevPAR or slower openings fail.
Recent events: 2026-10-27: Hilton reported Q3 2026 results. Diluted EPS was $2.37, and diluted EPS adjusted for special items was $2.45, up from $2.11. Net income was $536 million and adjusted EBITDA was $1,058 million. System-wide comparable RevPAR rose 5.8%. Hilton added 23,000 net rooms, and net unit growth was 6.0% from a year earlier. It raised its 2026 RevPAR outlook to growth of 4.0% to 4.5% and its adjusted EBITDA outlook to $4,060 million to $4,080 million. It bought back 2.6 million shares in the quarter. 2026-10-20: Hilton said that it will move its stock listing from the New York Stock Exchange to Nasdaq on November 5, 2026, with the same ticker, HLT. 2026-07-28: Hilton reported Q2 2026 results. Diluted EPS was $2.10, and diluted EPS adjusted for special items was $2.29. System-wide comparable RevPAR rose 3.9%, and the pipeline reached 541,300 rooms. Hilton issued $1.0 billion of 5.500% senior notes due 2031 in May 2026, and it launched the Undergraduate by Hilton brand in June 2026. 2026-04-28: Hilton reported Q1 2026 results. Diluted EPS was $1.66, and diluted EPS adjusted for special items was $2.01. System-wide comparable RevPAR rose 3.6%. In March 2026, Hilton launched the Select by Hilton brand, with YOTEL as its first brand, and it extended its revolving credit facility to an expected maturity in March 2031. 2026-02-11: Hilton reported 2025 results. Diluted EPS was $6.12, and diluted EPS adjusted for special items was $8.11. Net income was $1,461 million and adjusted EBITDA was $3,725 million. System-wide comparable RevPAR rose 0.4%, and net unit growth was 6.7%. Hilton expected net unit growth of 6.0% to 7.0% for 2026 and capital return of about $3.5 billion.