Hyatt Stock Looks Undervalued

Hyatt Stock Looks Undervalued

The shares of Hyatt Hotels (NYSE: H) are currently trading at 20% below the pre-pandemic level observed in February 2020. Due to mandatory closures and a steep decline in leisure travel demand, the company reported $736 million of operating cash burn in 2020 and $58 million for H1 2021. In Q2 filings, the company highlighted recovering travel demand in the United States and China with 97% of rooms available for service. However, the fourth wave of the pandemic has been a headwind for the stock in the past month. Notably, Hyatt's strategy to expand its management & franchise division as a key earnings contributor, will limit losses, as fixed costs for this segment are much lower. Considering a quick rebound in leisure travel demand assisted by revenge tourism, and Hyatt cost control measures, Trefis believes that the stock is undervalued. We highlight the key factors driving Hyatt Hotels Valuation including revenues, margins, valuation multiple, and competitive comparison with peers in an interactive dashboard analysis. The travel and tourism sector again faces a grim near-term outlook despite widespread vaccination and a sharp rise in domestic air travel demand. The daily new Covid cases in the U. S. have more than doubled