UBS has raised its price target on Hilton Worldwide Holdings Inc. to $360 from $312 while retaining a Buy rating on the shares. The stock was trading at $315.96 and the company had a market capitalization of $72.45 billion at the time of the update.
The firm revised its financial model after reviewing Hilton's fourth-quarter earnings report. The uplift to the price target is driven explicitly by higher unit growth projections for fiscal years 2026 through 2028, according to UBS's updated assumptions.
In its valuation update UBS rolled forward the terminal valuation year to 2028 from 2027 and discounted that back to present value. The bank also shifted its applied multiple range higher, now using the upper end of a 17 to 19 times enterprise value-to-EBITDA range, compared with the 15 to 18 times range it had applied previously.
Market pricing for Hilton currently shows an enterprise value-to-EBITDA multiple of 29.73, a figure UBS characterizes as reflecting the company's premium valuation in the market. UBS noted that this multiple aligns with where Hilton has traded over the past three, five and 10 years and that those periods better reflect Hilton's largely asset-light business model.
The firm pointed out that Hilton's average EV/EBITDA multiple has increased over time as the company reduced its direct property ownership to roughly 1% of the portfolio today, a shift toward franchising and management that tends to support higher multiples in relative terms.
Separately, a third-party valuation analysis indicates the stock appears overvalued relative to its Fair Value even as 12 analysts have recently revised their earnings estimates upward. The analysis cites additional tips and comprehensive valuation metrics available through a proprietary Pro Research Report for those seeking deeper detail.
Hilton's fourth-quarter fiscal 2025 results underpinned the modeling updates. The company posted adjusted earnings per share of $2.08, beating an expectation of $2.02. Revenue for the quarter came in at $3.09 billion, ahead of the $2.99 billion analysts had anticipated.
Despite the positive earnings and revenue surprise, the company's stock experienced a slight pre-market decline, signaling mixed investor sentiment following the release. The results nevertheless illustrate a robust operating performance in the final quarter of the year.
Analysts and investors are likely to continue tracking Hilton's performance and the assumptions that underpinned UBS's revised target - notably the unit growth forecast for fiscal 2026-2028 and the elevated multiple now applied in the valuation.
Key points
- UBS raised its Hilton price target to $360 from $312 and maintained a Buy rating; current share price is $315.96 and market capitalization is $72.45 billion.
- The upgrade reflects higher unit growth assumptions for fiscal years 2026-2028 and a roll-forward of the valuation year to 2028, with UBS moving to the upper end of a 17-19x EV/EBITDA range.
- Hilton reported Q4 fiscal 2025 adjusted EPS of $2.08 versus $2.02 expected and revenue of $3.09 billion versus $2.99 billion expected, yet the stock saw a modest pre-market decline.
Risks and uncertainties
- Valuation risk - The company's market EV/EBITDA multiple of 29.73 is well above the multiple UBS now applies and a third-party analysis flags the stock as appearing overvalued relative to Fair Value; this affects equity investors and broader market sentiment.
- Forecast risk - UBS's price target depends on higher unit growth projections for fiscal 2026-2028; if unit expansion falls short, implied valuation support could weaken, impacting hospitality sector investment cases.
- Market reaction uncertainty - Despite stronger-than-expected quarterly results, the stock dipped pre-market, indicating investors may weigh execution and forward guidance differently than headline earnings and revenues.