A Closer Look at Host Hotels & Resorts (HST) Valuation After FTSE All-World Index Removal

Host Hotels & Resorts (HST) was recently dropped from the FTSE All-World Index, and that kind of removal can grab the attention of anyone tracking the stock. When a company exits a widely followed index, it often triggers adjustments from institutional investors and funds that aim to mirror that index, sometimes leading to increased volatility or a short-term hit to demand. While Host reaffirmed its regular quarterly dividend just days earlier, that is more business as usual. The real conversation starter is the FTSE index removal. This development comes after a year in which Host Hotels & Resorts has notched only a slight gain since January but trails its prior three- and five-year returns, which look much stronger by comparison. The stock gained over the past three months, although results softened this past week. Combined with modest revenue and net income growth recently, momentum might not feel like it is running at full speed, but long-term shareholders still see real gains. The drop from the index stands out as the biggest catalyst for attention right now, even if the broader business operations have been steady. With Host’s valuation now under the microscope following its index exit, some investors may wonder if this presents a window of opportunity or if the current price already reflects the company’s prospects for future growth.

Most Popular Narrative: 6% Undervalued

The most-watched narrative among analysts considers Host Hotels & Resorts to be trading below its estimated fair value, suggesting that there is room for upside based on current and future fundamentals.

The company’s strategic focus on upgrading and repositioning premium assets in top markets, exemplified by substantial ROI from major renovations and development projects, continues to enhance RevPAR index and property values. This signals a strong runway for RevPAR-led earnings growth as consumer demand for high-end urban and resort experiences rises.

Curious about what’s lifting Host Hotels & Resorts above the pack? The secret mix powering this valuation lies in just a handful of bold analyst assumptions. One forecast in particular transforms future earnings into a premium multiple, and it might surprise you. Ready to find out which levers they’re betting on?

Result: Fair Value of $18.56 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, ongoing headwinds in business travel demand and exposure to climate risks could quickly shift analyst optimism regarding Host Hotels & Resorts' outlook.

Find out about the key risks to this Host Hotels & Resorts narrative.

Another View: Discounted Cash Flow Tells a Different Story

Looking at Host Hotels & Resorts through the lens of our DCF model gives a more optimistic perspective. This analysis suggests the shares are trading well below intrinsic value. Still, it is important to consider whether the DCF captures all the risks facing the business.

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

Stay updated when valuation signals shift by adding Host Hotels & Resorts to your watchlist or portfolio. Alternatively, explore our screener to discover other companies that fit your criteria.

Build Your Own Host Hotels & Resorts Narrative

If you see things differently or want to dig into the numbers yourself, you can craft your own story about Host Hotels & Resorts in just minutes using Do it your way.

A great starting point for your Host Hotels & Resorts research is our analysis highlighting 1 key reward and 2 important warning signs that could impact your investment decision.

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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.

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