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1. Company Snapshot

1.a. Company Description

Park is the second largest publicly traded lodging REIT with a diverse portfolio of market-leading hotels and resorts with significant underlying real estate value.Park's portfolio currently consists of 60 premium-branded hotels and resorts with over 33,000 rooms primarily located in prime city center and resort locations.

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1.b. Last Insights on PK

Park Hotels & Resorts Inc.'s recent performance was negatively impacted by a decrease in RevPAR, which dropped 6.1% year-over-year, and a miss in quarterly FFO, coming in at $0.35 per share versus the expected $0.39 per share. Asset Management One Co. Ltd. and Yousif Capital Management LLC reduced their stakes in the company. However, the company has taken steps to strengthen its balance sheet, including the sale of its Hilton San Francisco hotels. Additionally, Park Hotels & Resorts has a sustainable dividend yield of nearly 9.6%, according to a recent rating (Source: Park Hotels & Resorts: Strong Foundation And Long-Term Upside Outweigh Near-Term Headwinds).

1.c. Company Highlights

2. Park Hotels' Q3 Earnings: A Closer Look

Park Hotels reported total hotel revenues of $585 million and hotel adjusted EBITDA of $141 million, translating to a hotel adjusted EBITDA margin of 24.1% for the third quarter. The company's adjusted FFO per share came in at $0.35, below analyst estimates of $0.39. RevPAR was $181, representing a 6% decline over the prior year, or down 5% excluding the Royal Palm South Beach, which suspended operations in May for its full-scale renovation.

Publication Date: Nov -04

📋 Highlights
  • Liquidity Strengthened: Extended corporate credit facility to $2.1 billion, including a $1 billion revolver and $800 million term loan, to address 2026 maturities.
  • Capital Reinvestment: Allocated $220 million in 2024 for renovations, including the Royal Palm project expected to double EBITDA from $14M to $28M at 15–20% IRR.
  • Revenue Trends: Q3 RevPAR fell 6% YoY to $181 ($181 vs. prior year), with adjusted EBITDA margin at 24.1% despite flat expense growth.
  • Dividend Strategy: Withheld a $50M+ special dividend to preserve liquidity for strategic projects, maintaining regular $0.25/share quarterly payout.

Financial Performance

The company's financial performance was impacted by softer top-line results, but continued cost discipline held expense growth relatively flat for the quarter. Adjusted EBITDA was $130 million, and the company's liquidity increased to $2.1 billion following the amendment and upsizing of its corporate credit facility.

Valuation Metrics

With a P/E Ratio of -169.48 and a P/S Ratio of 0.81, the market appears to have already priced in significant challenges for the company. The Dividend Yield stands at 13.7%, which may be attractive to income investors. However, the company's ROE and ROIC are both negative, indicating potential underlying issues.

Operational Highlights

The company remains focused on reinvesting in its assets, with approximately $220 million in strategic renovation projects expected to be executed this year. Thomas Baltimore noted that "reinvesting in our assets represents the highest and best use of capital." The company's major hotel redevelopments, including the Royal Palm South Beach, are expected to drive future growth.

Outlook

Park Hotels has adjusted its full-year outlook, expecting RevPAR growth to be down around 2% at the midpoint. Analysts estimate next year's revenue growth at 2.2%. The company's guidance reflects weaker-than-expected third-quarter results and continued softness in leisure demand expected for the fourth quarter.

Capital Allocation

Thomas Baltimore emphasized that paying down debt and reinvesting in the portfolio are the company's top priorities, with share buybacks being opportunistic. The company has returned $1.3 billion to shareholders over the last three years through dividends and buybacks.

3. NewsRoom

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Fisher Asset Management LLC Has $10.53 Million Stock Position in Park Hotels & Resorts Inc. $PK

Dec -04

Source: defenseworld.net

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Capital Fund Management S.A. Has $3.79 Million Stake in Park Hotels & Resorts Inc. $PK

Dec -03

Source: defenseworld.net

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Franklin Resources Inc. Has $3.59 Million Position in Park Hotels & Resorts Inc. $PK

Dec -03

Source: defenseworld.net

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Park Hotels & Resorts Inc. $PK Shares Bought by Boston Partners

Dec -01

Source: defenseworld.net

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Critical Review: Park Hotels & Resorts (NYSE:PK) and Sabra Healthcare REIT (NASDAQ:SBRA)

Dec -01

Source: defenseworld.net

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Park Hotels Completes Assets Disposition to Focus on Core Portfolio

Nov -25

Source: zacks.com

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Pasithea Therapeutics Announces Completion of Cohort 7 in Ongoing Phase 1 Trial of PAS-004 in Advanced Cancer Patients, with Positive Safety, Pharmacokinetic (PK), and Pharmacodynamic (PD) Data

Nov -24

Source: globenewswire.com

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Park Hotels & Resorts Inc. Announces Completion of the Sale of Hilton San Francisco Union Square and Parc 55 San Francisco – a Hilton Hotel by Court-Appointed Receiver

Nov -24

Source: businesswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (2.26%)

6. Segments

Rooms

Expected Growth: 2.5%

Park Hotels & Resorts Inc.'s 2.5% rooms growth is driven by increasing demand for luxury accommodations, strategic property renovations, and expansion into high-growth markets. Additionally, the company's focus on operational efficiency and effective revenue management strategies contribute to the growth. Furthermore, the growing trend of experiential travel and rising disposable incomes also support the segment's growth.

Food and Beverage

Expected Growth: 1.8%

Park Hotels & Resorts Inc.'s Food and Beverage segment growth of 1.8% is driven by increasing demand for luxury experiences, strategic hotel renovations, and expansion of F&B outlets. Additionally, the company's focus on enhancing customer experience through digital platforms and loyalty programs contributes to the growth. Furthermore, the rise in business travel and meetings, incentives, conferences, and exhibitions (MICE) also supports the segment's growth.

Ancillary Hotel

Expected Growth: 2.2%

The 2.2% growth in Ancillary Hotel segment of Park Hotels & Resorts Inc. is driven by increasing demand for experiential travel, strategic partnerships with travel companies, and investments in digital platforms to enhance customer experience. Additionally, the company's focus on premium amenities and services, such as food and beverage offerings, has contributed to the growth.

Other

Expected Growth: 1.5%

Park Hotels & Resorts Inc.'s 1.5% growth is driven by increasing demand for luxury travel, strategic acquisitions, and effective cost management. Additionally, the company's focus on renovating and rebranding its properties, as well as its strong balance sheet, contribute to its growth momentum.

7. Detailed Products

Luxury Accommodations

Park Hotels & Resorts offers luxurious rooms and suites in prime locations, providing guests with upscale amenities and exceptional service.

Meeting and Event Spaces

The company provides state-of-the-art meeting and event facilities, catering to corporate events, weddings, and social gatherings.

Dining and Nightlife

Park Hotels & Resorts features a range of restaurants, bars, and lounges, offering diverse culinary experiences and entertainment options.

Recreational Activities

The company offers a variety of recreational activities, including fitness centers, spas, and outdoor activities, to enhance the guest experience.

Loyalty Program

Park Hotels & Resorts' loyalty program rewards repeat guests with exclusive benefits, discounts, and personalized services.

8. Park Hotels & Resorts Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Park Hotels & Resorts Inc. faces moderate threat from substitutes, as customers have alternative accommodation options such as Airbnb, hostels, and vacation rentals.

Bargaining Power Of Customers

Park Hotels & Resorts Inc. has a diverse customer base, which reduces the bargaining power of individual customers. Additionally, the company's loyalty program and rewards scheme help to retain customers.

Bargaining Power Of Suppliers

Park Hotels & Resorts Inc. relies on various suppliers for goods and services, including food and beverage providers, linen suppliers, and maintenance contractors. While the company has some bargaining power, suppliers can still exert pressure on prices and terms.

Threat Of New Entrants

The hotel industry has high barriers to entry, including significant capital requirements, regulatory hurdles, and the need for specialized expertise. This limits the threat of new entrants to Park Hotels & Resorts Inc.

Intensity Of Rivalry

The hotel industry is highly competitive, with many established players and a high degree of price sensitivity. Park Hotels & Resorts Inc. faces intense rivalry from other hotel chains, independent hotels, and alternative accommodation providers.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 54.06%
Debt Cost 7.26%
Equity Weight 45.94%
Equity Cost 14.02%
WACC 10.37%
Leverage 117.70%

11. Quality Control: Park Hotels & Resorts Inc. passed 2 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Rithm Capital

A-Score: 6.8/10

Value: 6.6

Growth: 2.3

Quality: 6.0

Yield: 10.0

Momentum: 6.0

Volatility: 10.0

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Apple Hospitality REIT

A-Score: 6.6/10

Value: 7.2

Growth: 5.7

Quality: 7.0

Yield: 9.0

Momentum: 2.0

Volatility: 8.7

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Park Hotels & Resorts

A-Score: 6.1/10

Value: 8.6

Growth: 4.9

Quality: 4.6

Yield: 10.0

Momentum: 2.5

Volatility: 6.0

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Innovative Industrial Properties

A-Score: 6.1/10

Value: 6.6

Growth: 6.3

Quality: 8.4

Yield: 10.0

Momentum: 0.5

Volatility: 4.7

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Host Hotels & Resorts

A-Score: 6.1/10

Value: 5.5

Growth: 5.6

Quality: 5.6

Yield: 7.0

Momentum: 4.0

Volatility: 8.7

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Ryman Hospitality Properties

A-Score: 5.3/10

Value: 3.3

Growth: 7.0

Quality: 4.6

Yield: 6.0

Momentum: 2.5

Volatility: 8.7

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

10.53$

Current Price

10.53$

Potential

-0.00%

Expected Cash-Flows