What Happened?
Shares of hotel company Hilton (NYSE: HLT) jumped 4.6% in the morning session after the company reported third-quarter results that surpassed analyst expectations and raised its full-year profit forecast.
The hotel operator announced adjusted earnings of $2.11 per share on revenue of $3.12 billion. Both figures came in ahead of Wall Street's estimates, with sales growing 8.8% compared to the same period in the previous year. In addition to the strong quarterly performance, Hilton lifted its adjusted earnings per share guidance for the full year to a range of $7.97 to $8.06.
After the initial pop the shares cooled down to $278.73, up 4.7% from previous close.
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What Is The Market Telling Us
Hilton’s shares are not very volatile and have only had 2 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 6 months ago when the stock dropped 5.9% on the news that stocks gave back some of the gains from the previous day as the White House clarified the tariffs on imports from China would add up to 145%, while the baseline 10% tariffs remained in place for all countries.
This reminded markets that the global trade environment remained volatile, limiting the potential for sustained gains. Also, President Trump said he was willing to accept pain in the short term, and was aware his policies could cause a recession, but he remained more mindful of a more severe case of economic depression (higher unemployment and prolonged downturn). For investors, this suggested that the administration could prioritize long-term structural shifts over near-term economic stability, further increasing policy-driven risk in the markets.
Hilton is up 13.7% since the beginning of the year, and at $278.73 per share, has set a new 52-week high. Investors who bought $1,000 worth of Hilton’s shares 5 years ago would now be looking at an investment worth $2,953.
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