Hyatt Hotels Corp - Class A

Shares of global hotelier Hyatt appreciated 34.9% and helped performance by 146 bps in the second quarter as revenue per available room (RevPAR) accelerated and management indicated they are seeing increased demand from franchisees for its brands. In addition, the company still expects to grow units between 6% and 7% this year with management indicating they expect it to be in the upper end of that range. We believe this growth combined with mid-single-digit RevPAR growth and slight margin improvement should lead to low double-digit EBITDA growth this year. This should generate strong free cash flow, which the company can use for further share buybacks and reinvestment back into the business.

Hyatt Hotels Corporation's shares increased in the second quarter as revenue per available room accelerated, indicating strong demand and pricing power in the hospitality sector. The company's ability to enhance revenue through effective management and strategic positioning in the market supports our bullish outlook. We believe Hyatt's brand strength and operational efficiencies create a competitive moat, allowing it to capitalize on the ongoing recovery in travel and tourism. This positions Hyatt favorably for sustained growth in the coming quarters.

Despite a 10.3% decline in shares, we believe Hyatt Hotels Corporation is well-positioned for growth. The company expects to grow units between 6% and 7% this year, supported by strong revenue growth and significant pricing power. This resilience in the face of macroeconomic uncertainty, combined with a strong investment-grade balance sheet, allows Hyatt to generate robust free cash flow for share buybacks and reinvestment. Furthermore, Hyatt trades at a discount to peers despite similar growth prospects, suggesting that the market may recognize its value over time.