Key Takeaways:
- Net Unit Growth: 6.5-7% annually, driven by conversions and global expansion
- Price Projection: Based on current execution, HLT stock could reach $401 by December 2029
- Potential Gains: This target implies a total return of 35% from the current price of $298
- Annual Return: Investors could see roughly 7.8% growth over the next 3.9 years
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Hilton Worldwide Holdings (HLT) just opened its 9,000th hotel. The company added 199 hotels in Q3, up more than 35% year-over-year, while achieving net unit growth of 6.5%.
CEO Chris Nassetta is executing a brand-led strategy that adds nearly three hotels per day.
- With conversions representing 40% of 2025 openings and a pipeline exceeding 515,000 rooms, Hilton is capturing market share while maintaining pricing power.
- Adjusted EBITDA grew 8% year-over-year, predominantly driven by better-than-expected growth in non-RevPAR-driven fees, disciplined cost control, and some timing items outweighing RevPAR softness.
- The company expects to return $3.3 billion to shareholders through buybacks and dividends in 2025.
Despite near-term headwinds, Hilton stock trades at $298, offering upside for investors who recognize the company’s development momentum.
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What the Model Says for Hilton Stock
We analyzed Hilton through its transformation into a global hotel powerhouse with unmatched brand strength.
The company is expanding its luxury and lifestyle portfolio while capturing conversion opportunities. With the launch of Outset Collection—the company’s 25th brand—management is targeting independent hotels that comprise over 50% of global supply.
New development construction starts are up nearly 20% in 2025. The Hilton Honors loyalty program is approaching 70% occupancy contribution, growing 15-20% annually.
Using a forecast of 8.0% annual revenue growth and 26.3% operating margins, our model projects the stock will rise to $327 within 1.9 years. This assumes a 28.6x price-to-earnings multiple.
That represents compression from Hilton’s historical P/E averages of 31.4x (one year) and 32.5x (five years). The lower multiple acknowledges near-term RevPAR pressures from government spending declines and international travel softness.
The real value lies in executing the development strategy and leveraging technology to drive guest satisfaction and owner profitability.
Our Valuation Assumptions
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Our Valuation Assumptions
TIKR’s Valuation Model lets you plug in your own assumptions for a company’s revenue growth, operating margins, and P/E multiple, and calculates the stock’s expected returns.
Here’s what we used for HLT stock:
1. Revenue Growth: 8.0%
Hilton’s growth centers on unit expansion.
The company opened 199 hotels in Q3, growing net units 6.5%. Management expects annual growth of 6.5-7% over the next several years. With 515,000 rooms in the pipeline (half of which are under construction), this trajectory is highly visible.
Nearly 40% of 2025 openings are conversions. The new Outset Collection targets independent hotels that comprise over 50% of the global supply.
The company operates in 141 countries, with an average of only 4 of its 25 brands per country, demonstrating a significant growth runway ahead.
2. Operating margins: 26.3%
Hilton is expanding margins while investing in growth.
With 90% of enterprise solutions in the cloud, the company has established itself as a technology leader. This platform enables rapid AI innovation.
The company has 41 AI use cases in production, targeting efficiency and customer experience. Hilton introduced system fee reductions tied to quality scores, sharing efficiency gains with owners.
3. Exit P/E Multiple: 28.6x
The market values Hilton at 33.8x earnings. We assume the P/E will compress to 28.6x over our forecast period.
Near-term RevPAR pressures from economic uncertainty weigh on the multiple. Q3 system-wide RevPAR declined 1.1%.
As unit growth compounds and technology investments drive differentiation, Hilton should command a premium multiple. The company generates over 50% free cash flow conversion and maintains an industry-leading development share.
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What Happens If Things Go Better or Worse?
Hotel companies face economic cycles and competitive pressures. Here’s how Hilton stock might perform under different scenarios through December 2029:
- Low Case: If revenue growth slows to 7.2% and margins compress to 15.7%, investors still see an 8.1% total return (2.0% annually).
- Mid Case: With 8.0% growth and 16.5% margins, we expect a total return of 34.6% (7.8% annually).
- High Case: If development accelerates and Hilton maintains 17.0% margins while growing at 8.8%, returns could hit 62.2% total (13.1% annually).
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The range reflects execution on unit growth targets, success in converting independent hotels, and RevPAR recovery timing.
In the low case, construction starts slow or RevPAR remains challenged through 2026.
In the high case, RevPAR rebounds as economic growth accelerates, the 2026 event calendar (midterms, America’s 250th anniversary, World Cup) drives demand, and conversion momentum strengthens with Outset Collection gaining traction.
How Much Upside Does Hilton Stock Have From Here?
With TIKR’s new Valuation Model tool, you can estimate a stock’s potential share price in under a minute.
All it takes is three simple inputs:
- Revenue Growth
- Operating Margins
- Exit P/E Multiple
If you’re not sure what to enter, TIKR automatically fills in each input using analysts’ consensus estimates, giving you a quick, reliable starting point.
From there, TIKR calculates the potential share price and total returns under Bull, Base, and Bear scenarios so you can quickly see whether a stock looks undervalued or overvalued.
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
