Howard Hughes Holdings (HHH): Exploring Valuation Following Bill Ackman’s Executive Chair Appointment and Increased Stake

There has been a surge of attention around Howard Hughes Holdings (NYSE: HHH) lately, and it all comes down to Bill Ackman’s recent moves. Ackman, already well known in the investment world, didn’t just add more shares to his hedge fund’s portfolio; he also stepped in as the company’s executive chairman during the second quarter. It is not every day that a high-profile name like Ackman deepens his commitment both financially and at the boardroom table, which has certainly put this real estate developer squarely in the market’s spotlight. Against this backdrop, Howard Hughes Holdings’ share price has seen upward momentum over the past three months. Year to date, the stock is almost flat, but it has delivered double-digit growth in both the past month and the past three months. This contrasts with a relatively modest gain for the past year, and when looking at the past three and five years, the return profile appears much brighter. These moves have come alongside strong revenue and earnings growth in recent annual results, keeping the company on many value-focused investors’ radars. With this renewed market interest and leadership change, investors are considering whether these developments signal further opportunity, or if the market has already accounted for Ackman’s influence in the share price.

Most Popular Narrative: 7.6% Undervalued

According to community narrative, Howard Hughes Holdings is currently seen as undervalued, with analysts pointing to significant long-term opportunity stemming from real estate and diversification moves.

The company's substantial undeveloped land bank in highly desirable markets positions it to capture long-term price appreciation and incremental cash flow as demand for premium, amenity-rich suburban and town-center communities intensifies. This is expected to enhance long-term revenue growth and intrinsic asset value.

Curious what’s fueling this “undervalued” call? The narrative focuses on projections for both top-line and profit growth, alongside the possibility of a future multiple more commonly associated with industry heavyweights. Just how strong are these forward-looking assumptions, and could they influence the stock even further? The answers may be more surprising than expected.

Result: Fair Value of $82.5 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts. However, execution risk related to the insurance acquisition or potential setbacks in key property markets could challenge the case for sustained long-term value. Find out about the key risks to this Howard Hughes Holdings narrative.

Another View: What Does Our DCF Model Show?

To balance the analyst consensus, our SWS DCF model takes a different approach by projecting future cash flows. This model also points to undervaluation, though it relies on its own assumptions about growth and risk. Which perspective will prove more reliable as the company evolves?

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Howard Hughes Holdings for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own Howard Hughes Holdings Narrative

If you see things differently or want to dig into the details yourself, you can put together your own narrative in just a few minutes. Do it your way

A great starting point for your Howard Hughes Holdings research is our analysis highlighting 4 key rewards and 2 important warning signs that could impact your investment decision.

Looking for More Smart Investment Moves?

Don’t limit yourself to just one idea. Make sure you’re always a step ahead in the market. See where opportunity is building by acting on these powerful trends shaping tomorrow’s portfolio standouts:

• Uncover up-and-coming tech innovators shaking up the AI landscape by checking out AI penny stocks.
• Secure steady income and build resilience into your strategy by browsing dividend stocks with yields > 3%.
• Tap into compelling bargains with strong growth potential when you explore undervalued stocks based on cash flows.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com