Bernstein analysts suggest that Hyatt Hotels (H, Financial) acquiring Playa Hotels & Resorts could be its most transformative deal since acquiring Apple Leisure Group in 2021. The firm rates Hyatt as "outperform" with a target price of $188, indicating a potential upside of 17.6%.
Hyatt's management has been achieving multiple strategic goals simultaneously. The acquisition of Playa would not distract from its future prospects. Bernstein notes Hyatt's focus on expanding its all-inclusive hotel business, and Playa could add more boutique hotels to its portfolio. Additionally, Hyatt might acquire some hotels directly from competitors, increasing its market share in the sector.
While the acquisition is not yet confirmed, it could be significant for Hyatt. Playa is largely asset-heavy, owning 16 of its 24 operated hotels. Hyatt might consider selling some real estate, and the true value of the deal would depend on the real estate recovery, which could take years to realize.
