With a market cap of $12.2 billion, Bethesda, Maryland-based Host Hotels & Resorts, Inc. (HST) is the largest lodging real estate investment trust (REIT) specializing in luxury and upper-upscale hotels. It owns a portfolio of 81 properties with approximately 43,400 rooms in the U.S. and internationally, partnering with leading hotel brands like Marriott, Ritz-Carlton, and Hyatt.

Shares of the lodging real estate investment trust have underperformed the broader market over the past 52 weeks. HST has risen 11.1% over this time frame, while the broader S&P 500 Index ($SPX) has rallied 35.2%. In 2024, shares of HST are down nearly 11%, compared to SPX’s 20.1% gain on a YTD basis. 

Zooming in further, HST’s underperformance becomes more evident when compared to the Real Estate Select Sector SPDR Fund’s (XLRE) 28.5% gain over the past 52 weeks and 6.7% return on a YTD basis.

Host Hotels & Resorts has underperformed due to a slow recovery in business travel and increased competition from alternative lodging options. Moreover, despite reporting better-than-expected Q2 adjusted FFO per share of $0.57 on Jul. 31, shares of HST dropped 4.4% the following day, mainly due to lowered guidance and signs of slower growth. Specifically, the company reduced its 2024 AFFO guidance to a range of $1.90 per share - $1.98 per share, citing weaker-than-expected domestic leisure demand and slower recovery in Maui. Additionally, the company revised its RevPAR (Revenue per Available Room) projection downward to $208 - $213, disappointing investors looking for stronger occupancy and rate growth. Finally, stagnant hotel EBITDA growth and a slight drop in average room rates indicated margin pressures, raising concerns about profitability stability.

For the current fiscal year, ending in December, analysts expect HST’s FFO to grow 2.1% year-over-year to $1.96 per share. The company’s earnings surprise history is promising. It beat or met the consensus estimates in the last four quarters. 

Among the 18 analysts covering the stock, the consensus rating is a “Moderate Buy.” That’s based on 12 “Strong Buy” ratings, one “Moderate Buy,” three Holds,” and two “Strong Sells.” 

On Oct. 17, Compass Point upgraded Host Hotels & Resorts from "Neutral" to "Buy," raising its price target to $22. As of writing, HST is trading below the mean price target of $20.63. The Street-high price target of $24, implies a potential upside of 38.5% from the current price. 

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On the date of publication, Sohini Mondal did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.