Evercore Adjusts Hyatt Hotels Rating Citing Slowed Earnings Growth

Evercore ISI has shifted its rating on Hyatt Hotels from Outperform to In Line, citing a pause in the upward movement of earnings estimates and a lack of fresh catalysts propelling the stock higher. The research firm points out that while the broader U.S. lodging sector is beginning to show improved performance, particularly among higher-end properties, Hyatt’s financial forecast is facing some headwinds.

In the evolving lodging market of 2025, demand patterns have been uneven. Upscale hotel segments have generally outperformed, whereas lower-tier properties have experienced weaker demand. Within this context, Evercore projects U.S. Revenue Per Available Room (RevPAR) will improve sequentially starting in the second quarter, driven by easier year-over-year comparisons from April, ongoing stimulus impacts, marquee events such as the World Cup, and a relatively favorable holiday schedule.

Despite these generally positive trends in the lodging industry, Evercore notes that Hyatt presents a more challenging picture. The firm has revised its net revenue projections for Hyatt downward by 3% for 2026 relative to its previous estimates, positioning these figures approximately 6% below consensus Wall Street expectations. Additionally, Evercore scaled back its 2026 EBITDA estimates by an equivalent 3%, now standing 2% beneath the consensus. While most lodging brands saw only marginal forecast adjustments, Hyatt experienced the most significant negative revisions among them.

The downgrade reflects Evercore’s recognition that Hyatt has already realized major near-term strategic milestones that previously acted as stock catalysts, including divestiture of Playa real estate assets and renewal of its credit card partnership. These achievements are now largely priced into current expectations, but the absence of new positive developments limits potential earnings upgrades.

Moreover, Hyatt’s shares have experienced a valuation rerating, appreciating by roughly two turns on an EV/EBITDA basis over the past year even as analysts have slightly lowered earnings estimates. This valuation expansion contrasts with Hilton’s approximate one-turn increase and Marriott’s modest half-turn uplift, suggesting Hyatt’s current valuation is comparatively balanced.

Evercore also highlights operational pressures within Hyatt’s business segments. The distribution division, contributing near 27% of total revenue, has faced a pronounced decline in profitability, dropping 42% since 2022. Simultaneously, RevPAR in the Americas excluding the United States—which represents around 17% of Hyatt’s room inventory and includes all-inclusive resorts—has plateaued, interrupting prior periods of solid high single-digit growth.

In its updated sector outlook, Evercore retains Marriott as its preferred lodging brand pick and continues to favor Ryman Hospitality Properties within lodging REITs. This positioning reflects confidence in Marriott's relative strength amid the shifting lodging landscape and Ryman’s resilience in real estate investment trust performance.