Bull of the day: Xenia Hotels (XHR) – April 7, 2022

Xenia Hotels & Resorts (XHR Free Report) finds itself in the right sector in 2022: travel. This Zacks Rank #1 (Strong Buy) is expected to grow triple digit earnings this year.

Xenia has 34 properties with 9,814 rooms in 14 states. Xenia’s hotels belong to the luxury and upscale market segments and are operated and/or licensed by industry leaders such as Marriott, Hyatt, Kimpton, Fairmont, Loews, Hilton, The Kessler Collection and Davidson.

Another great pace in the fourth quarter of 2021

On March 1, 2022, Xenia released its fourth quarter 2021 results and beat the Zacks consensus for the 6th consecutive quarter. Gains were $0.25 against the Zacks consensus of $0.17, for a 47% beat.

He’s put together a nice set of beats since the pandemic hit in 2020.

As the travel recovery continued, Xenia’s portfolio recovery continued. Its Same-Property portfolio recorded a RevPAR of $136.01, down just 17.5% from the fourth quarter of 2019, which was pre-pandemic. In December, the portfolio only recorded an 8% decline compared to December 2019.

Hotel locations in popular Sunbelt resort states supported the portfolio during the quarter.

Additionally, the company provided an update on what it was seeing in the first quarter of 2022.

The Omicron outbreak affected January performance as their current Same-Property portfolio, which had only 32 hotels after the sale of the Monaco Chicago Hotel, saw a RevPAR decline of around 37% from compared to January 2019.

But, preliminary results for February showed a “substantial rebound” as the projected RevPAR of around $157 would represent a decline of around 19% from a very strong February 2019.

This would be the highest absolute monthly RevPar since the start of the pandemic.

There is no doubt that Americans were traveling for spring break in March.

Xenia will publish its first quarter results on May 3, 2022 before the market opens.

Analysts are optimistic about 2022

Analysts are optimistic ahead of the first quarter earnings report. 1 estimate was revised up for 2022 only last week.

The Zacks 2022 consensus estimate fell from $1.05 to $1.23 just 90 days ago. That’s a profit growth of 339% over last year, when the company earned just $0.28.

Tread Water shares: a buying opportunity?

Travel stocks were all hot in 2020 after reopening. Xenia shares have jumped 123% over the past 2 years, beating the S&P 500 which is up only 81%.

However, over the past year, stocks have actually fallen 1.6% even though the outlook has improved.

Image source: Zacks Investment Research

Xenia shares are cheap, with a forward P/E of 15.4. However, it still does not pay any type of dividend.

Travel is expected to continue to pick up steam this year.

For those looking for an attractively valued travel game, Xenia is one to keep on your shortlist.

Comments are closed.