Host Hotels Stock Rises 10.3% Quarter to Date: Will the Trend Last?
The Bethesda, MD-based lodging real estate investment trust (REIT) owns a portfolio of luxury and upper-upscale hotels in the top U.S. markets and the Sunbelt region. The recovery in demand for the company's well-located properties in markets with strong demand drivers has benefited the company lately.
Image Source: Zacks Investment Research
Let us decipher the possible factors behind the surge in the stock price.
This Zacks Rank #3 (Hold) company has a strong Sunbelt exposure and presence in the top 21 U.S. markets. Its properties are advantageously located in central business districts of major cities, thus driving demand. The improvement in group travel demand and business transient demand has aided occupancy and revenue per available room growth over the past few quarters. In 2025, the company expects comparable hotel RevPAR growth between 0.5% and 2.5%.
Host Hotels undertakes strategic capital allocations to improve its portfolio quality and strengthen its position in the United States, where it has a greater scale and competitive advantage. In the first quarter of 2025, the company incurred $146 million in capital expenditure. For 2025, management expects total capital expenditures to be within $580-$670 million.
The company disposes of non-strategic assets with lower growth potential or properties with significant capital expenditure requirements through its capital-recycling program. It has redeployed the proceeds to acquire or invest in premium properties in markets expected to recover faster. Per the company's May 2025 Investor Presentation, from 2021 through the end of the fourth quarter of 2024, total dispositions amounted to $1.5 billion, which is 17.5 times the EBITDA multiple. Its acquisitions during this period amounted to $3.3 billion, which is 13.3 times the EBITDA multiple. Such efforts highlight its prudent capital-management practices, preserve balance sheet strength and pave the way to capitalize on long-term growth opportunities.
Host Hotels has a healthy balance sheet and has been undertaking steps to fortify its balance sheet. As of March 31, 2025, the company had $2.2 billion in total available liquidity. Moreover, it is the only company with an investment-grade rating among the lodging REITs, having ratings of Baa3/Positive from Moody's, BBB-/Stable from S&P Global and BBB/Stable from Fitch. This renders access to the debt market at favorable costs. Therefore, Host Hotels has ample financial flexibility for deploying capital for long-term growth opportunities while carrying out redevelopment initiatives.
Solid dividend payouts are a massive enticement for REIT investors, and Host Hotels has remained committed to that. HST has increased its dividend eight times in the last five years and has a 40% payout ratio. Such efforts boost investors' confidence in the stock. Check out Host Hotels & Resorts' dividend history here.
With the above-mentioned factors, we believe the rising trend in the stock is expected to continue in the near term.
On the macroeconomic front, recent heightened uncertainty surrounding trade policy and government spending is expected to weigh on the company's growth through the remainder of 2025. Historically, economic uncertainty has hindered business investment, which is strongly correlated to business transient and group demand.
Moreover, challenges in the supply chain have led to project delays across the United States, and a restrictive lending environment has made it difficult to obtain construction financing for future projects.
Some better-ranked stocks from the broader REIT sector are VICI Properties VICI and Medical Properties Trust MPW, each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for VICI's 2025 FFO per share has moved one cent northward to $2.35 over the past week.
The Zacks Consensus Estimate for MPW's 2025 FFO per share has moved one cent northward to 57 cents over the past month.
Note: Anything related to earnings presented in this write-up represents funds from operations (FFO), a widely used metric to gauge the performance of REITs.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Host Hotels & Resorts, Inc. (HST) : Free Stock Analysis Report
Medical Properties Trust, Inc. (MPW) : Free Stock Analysis Report
VICI Properties Inc. (VICI) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
Zacks Investment Research
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Business Upturn
an hour ago
- Business Upturn
JSW Cement lists at Rs 153.50, posts 4.4% gains over IPO price
Shares of JSW Cement made a positive debut on Monday, listing at ₹153.50 apiece — up 4.42% from the upper end of its IPO price band of ₹147. The Mumbai-based cement maker's IPO, open from August 7 to August 11, was priced in the range of ₹139-147 per share with a lot size of 102 shares. The company raised ₹3,600 crore, comprising a fresh issue of ₹1,600 crore and an offer-for-sale of ₹2,000 crore (13.60 crore shares). The issue saw an overall subscription of 7.77 times, with QIBs subscribing 15.80 times, NIIs 10.97 times, and retail investors 1.81 times. Employee quota was also fully subscribed. Analysts note that the brand's strong recall and stable demand outlook helped deliver a good listing despite modest oversubscription. Ahmedabad Plane Crash Aditya Bhagchandani serves as the Senior Editor and Writer at Business Upturn, where he leads coverage across the Business, Finance, Corporate, and Stock Market segments. With a keen eye for detail and a commitment to journalistic integrity, he not only contributes insightful articles but also oversees editorial direction for the reporting team.
Business Insider
2 hours ago
- Business Insider
COHR Earnings: Coherent Stock Crashes 16% on Disappointing Guidance
The stock of Coherent (COHR) is down 16% after the semiconductor company reported revenue guidance that disappointed Wall Street. Elevate Your Investing Strategy: Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence. The Pennsylvania-based company announced earnings per share (EPS) of $1, which topped the $0.92 expected among analysts. Revenue for the year's second quarter totaled $1.53 billion, which was ahead of the $1.51 billion forecast on Wall Street. Sales were up 16% from a year earlier. Unfortunately, Coherent's revenue guidance overshadowed what was otherwise a strong print from the optical materials and semiconductor concern. For the current quarter, Coherent said that it expects revenue of $1.53 billion, which is basically the same as sales generated in Q2 of this year and is 0.6% below analysts' consensus estimate. Laser Business Sale Coherent's networking business unit saw its revenue rise 39% year-over-year in calendar Q2 to $945 million, above expectations for $940 million in sales. That strong showing was partially offset by the company's other two business lines, materials and lasers, which were down a combined 8% in the quarter. Just before Coherent's latest earnings were released after markets closed, the company announced the sale of its laser business for defense markets at a price of $400 million. Money generated from the sale will be used to pay down the company's $3.7 billion in debt. Is COHR Stock a Buy? The stock of Coherent has a consensus Strong Buy rating among 15 Wall Street analysts. That rating is based on 14 Buy and one Hold recommendations issued in the last three months. The average COHR price target of $105.31 implies about 8% downside risk from current levels. These ratings are likely to change after the company's financial results.
Yahoo
3 hours ago
- Yahoo
US to explore cooperation with Pakistan on critical minerals, hydrocarbons
By Kanishka Singh WASHINGTON (Reuters) -Secretary of State Marco Rubio said Washington looked forward to exploring cooperation with Pakistan on critical minerals and hydrocarbons, with his comments coming in a statement issued by the State Department on Pakistan's Independence Day. WHY IT'S IMPORTANT Washington and Islamabad hailed a trade deal last month, which Pakistan said would result in lower tariffs and increased investment. Pakistan's Commerce Minister Jam Kamal has said Islamabad will offer U.S. businesses opportunities to invest in mining projects primarily in the southwestern Balochistan province through joint ventures with local companies, providing concessions such as lease grants. The province is home to key mining projects, including Reko Diq, run by mining firm Barrick Gold and believed to be one of the world's largest gold and copper mines. KEY QUOTES "We look forward to exploring new areas of economic cooperation, including critical minerals and hydrocarbons, and fostering dynamic business partnerships," Rubio said late on Wednesday. "The United States deeply appreciates Pakistan's engagement on counterterrorism and trade." CONTEXT Before President Donald Trump's administration, Islamabad's relationship with Washington had cooled in recent years, as the U.S. drew closer to Pakistan's traditional adversary India to counter China's rise, among other factors. Washington also resented Islamabad over Afghanistan, especially under former President Joe Biden's administration, which oversaw a chaotic withdrawal from Afghanistan and the takeover of the country by the Taliban insurgency that Washington accused Islamabad of backing. Pakistan denied the charge. In recent months, Washington's ties with Islamabad have improved. Trump took credit for a ceasefire between India and Pakistan after the Asian neighbors engaged in hostilities in May following an April attack in India-administered Kashmir. Pakistan praised Trump while India maintained that New Delhi and Islamabad should resolve their issues directly without outside involvement. COUNTERTERRORISM TALKS The U.S. and Pakistan held the latest round of counterterrorism talks in Islamabad on Tuesday. Washington has designated separatist militant group Balochistan Liberation Army as a "foreign terrorist organization." "The US-Pakistan counterterrorism dialogue joint statement is one of the most positive and effusive I've seen from these two countries on CT for quite a few years," Michael Kugelman, a Washington-based South Asia analyst and writer for Foreign Policy magazine, said.
