Hyatt Earnings: Brand Edge Intact Amid Slightly Higher Unit Attrition Levels

Hyatt shares dropped 7% in Oct. 31 trading as the firm said it expects higher unit attrition in 2024. We don’t see this culling as a sign that Hyatt’s brand (the primary source of our narrow moat rating) is deteriorating. We point to the hotelier’s 135,000 rooms in its pipeline—up 10% from a year ago and representing an industry-leading 41% of its existing base—as evidence that its competitive edge is intact. Thus, we don’t expect to materially change our 2025-33 average annual unit growth forecast of 4.4% or our $147 fair value estimate. We see the shares as appropriately valued.