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Host Hotels & Resorts Inc - Stock Quote HST

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Morningstar's Host Hotels & Resorts Inc Stock Analysis

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Host Reports Results Well Ahead of Expectations as EBITDA Margins Return to 2019 Levels in Q1

Kevin Brown, CFA Equity Analyst

Analyst Note

| Kevin Brown, CFA |

First-quarter results for Host Hotels & Resorts were ahead of our expectations, though we currently don’t anticipate making any material changes to our $18.50 fair value estimate for the no-moat company. Occupancy was 54.6% in the first quarter, which is up from the 28.5% level the company was at in 2021 but still below the 76.3% level Host saw in the first quarter of 2019. However, average daily rate was up 20.4% year over year and is now 13.9% ahead of the first quarter of 2019. As a result, revenue per available room grew 131.0% year over year, ahead of our estimate of 100.3% growth, and is now just 18.5% below 2019. What really impressed us this quarter is that hotel EBITDA margins hit 31.4%, which is in line with the level the company achieved in 2019 and well ahead of our estimate of 24.4%. The quick recovery of EBITDA margins helped Host report adjusted funds from operations of $0.39 per share in the first quarter, which is below the $0.48 figure the company reported in the first quarter of 2019 but well ahead of the $0.01 number it reported in the first quarter of 2021 and ahead of our $0.19 estimate. Still, while we may increase our short-term estimates for Host, we don’t plan to make any material changes to our fair value for the company since we still believe EBITDA margins will plateau around 32% over the long term.

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Host Hotels & Resorts Inc's Company Profile

Business Description

Host Hotels & Resorts owns 81 predominantly urban and resort upper-upscale and luxury hotel properties representing over 45,000 rooms, mainly in the United States. Host recently sold off the company's interests in a joint venture owning a portfolio of hotels throughout Europe and also sold other joint ventures that owned properties in Asia and the United States. The majority of Host’s portfolio operates under the Marriott and Starwood brands.

Contact
4747 Bethesda Avenue, Suite 1300
Bethesda, MD, 20814
T +1 240 744-1000
Sector Real Estate
Industry REIT - Hotel & Motel
Most Recent Earnings Mar 31, 2022
Fiscal Year End Dec 31, 2021
Stock Type Hard Assets
Employees 160

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