As of May 23, 2025, Hyatt Hotels Corp's estimated intrinsic value ranges from $84.03 to $193.36 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $193.36 | +51.6% |
| Discounted Cash Flow (5Y) | $165.97 | +30.1% |
| Dividend Discount Model (Multi-Stage) | $145.17 | +13.8% |
| Dividend Discount Model (Stable) | $96.96 | -24.0% |
| Earnings Power Value | $84.03 | -34.1% |
Is Hyatt Hotels Corp (H) undervalued or overvalued?
With the current market price at $127.54, the stock appears to be moderately undervalued.
Intrinsic value represents the "true" worth of a company based on its fundamentals rather than market sentiment. We've employed multiple methodologies to triangulate Hyatt Hotels Corp's intrinsic value, including:
The cost of capital is a critical factor in valuation models, representing the required return for investors.
| WACC Component | Low | High |
|---|---|---|
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.76 | 0.79 |
| Cost of equity | 7.4% | 9.3% |
| Cost of debt | 4.3% | 4.8% |
| Tax rate | 26.2% | 27.7% |
| Debt/Equity ratio | 0.29 | 0.29 |
| After-tax WACC | 6.4% | 8.0% |
Our DCF model projects cash flows over 5-year and 10-year horizons, with the following key assumptions:
| DCF Model | Fair Value | Enterprise Value | % from Terminal Value |
|---|---|---|---|
| 5-Year Growth | $166 | $18,432M | 74.9% |
| 10-Year Growth | $193 | $21,045M | 57.7% |
| 5-Year EBITDA | $190 | $20,723M | 77.7% |
| 10-Year EBITDA | $212 | $22,801M | 61.0% |
The DDM values a company based on its expected future dividend payments. We used two approaches:
EPV assesses a company's value based on its current normalized earnings power, assuming no growth.
| EPV Component | Value |
|---|---|
| Normalized Earnings | $754M |
| Discount Rate (WACC) | 8.0% - 6.4% |
| Enterprise Value | $9,455M - $11,770M |
| Net Debt | $2,593M |
| Equity Value | $6,862M - $9,177M |
| Outstanding Shares | 95M |
| Fair Value | $72 - $96 |
| Selected Fair Value | $84.03 |
| Metric | Value |
|---|---|
| Market Capitalization | $12171M |
| Enterprise Value | $14764M |
| Trailing P/E | 15.33 |
| Forward P/E | 10.03 |
| Trailing EV/EBITDA | 11.10 |
| Current Dividend Yield | 45.79% |
| Dividend Growth Rate (5Y) | 31.61% |
| Debt-to-Equity Ratio | 0.29 |
To determine the most reliable intrinsic value estimate, we weigh each valuation method based on:
| Valuation Method | Weight | Weighted Value |
|---|---|---|
| Discounted Cash Flow (10Y) | 30% | $58.01 |
| Discounted Cash Flow (5Y) | 25% | $41.49 |
| Dividend Discount Model (Multi-Stage) | 20% | $29.03 |
| Dividend Discount Model (Stable) | 15% | $14.54 |
| Earnings Power Value | 10% | $8.40 |
| Weighted Average | 100% | $151.48 |
Based on our comprehensive valuation analysis, Hyatt Hotels Corp's weighted average intrinsic value is $151.48, which is approximately 18.8% above the current market price of $127.54.
Key investment considerations:
Given these factors, we believe Hyatt Hotels Corp is currently moderately undervalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.