Should You Investigate Hyatt Hotels Corporation (NYSE:H) At US$117?

Let's talk about the popular Hyatt Hotels Corporation (NYSE:H). The company's shares saw significant share price movement during recent months on the NYSE, rising to highs of US$120 and falling to the lows of US$107. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether Hyatt Hotels' current trading price of US$117 reflective of the actual value of the large-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Hyatt Hotels’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

See our latest analysis for Hyatt Hotels

What's The Opportunity In Hyatt Hotels?

The stock seems fairly valued at the moment according to my valuation model. It’s trading around 2.30% above my intrinsic value, which means if you buy Hyatt Hotels today, you’d be paying a relatively reasonable price for it. And if you believe that the stock is really worth $114.37, then there isn’t really any room for the share price grow beyond what it’s currently trading. So, is there another chance to buy low in the future? Given that Hyatt Hotels’s share is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us an opportunity to buy later on. This is based on its high beta, which is a good indicator for share price volatility.

What does the future of Hyatt Hotels look like?

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. Though in the case of Hyatt Hotels, it is expected to deliver a highly negative earnings growth in the next few years, which doesn’t help build up its investment thesis. It appears that risk of future uncertainty is high, at least in the near term.

What This Means For You

Are you a shareholder? H seems fairly priced right now, but given the uncertainty from negative returns in the future, this could be the right time to reduce the risk in your portfolio. Is your current exposure to the stock beneficial for your total portfolio? And is the opportunity cost of holding a negative-outlook stock too high? Before you make a decision on the stock, take a look at whether its fundamentals have changed.

Are you a potential investor? If you’ve been keeping tabs on H for a while, now may not be the most optimal time to buy, given it is trading around its fair value. The stock appears to be trading at fair value, which means there’s less benefit from mispricing. In addition to this, the negative growth outlook increases the risk of holding the stock. However, there are also other important factors we haven’t considered today, which can help gel your views on H should the price fluctuate below its true value.

So while earnings quality is important, it's equally important to consider the risks facing Hyatt Hotels at this point in time. For example - Hyatt Hotels has 3 warning signs we think you should be aware of.

If you are no longer interested in Hyatt Hotels, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.