Park Hotels & Resorts
PK
$16.65
-0.72%
Park Hotels & Resorts is a lodging REIT that owns a concentrated portfolio of upper-upscale and luxury hotels, primarily in US gateway markets, with roughly 20,467 rooms across 31 wholly-owned hotels plus joint-venture interests in two additional properties; the company was spun out of Hilton Worldwide at the start of 2017 and remains heavily Hilton-branded. Its identity is that of a pure-play, asset-heavy hotel owner rather than an operator or brand company — a portfolio pruner that has sold international and lower-quality US assets to concentrate on high-RevPAR urban flagships, making it a leveraged bet on group, business, and urban leisure travel rather than a diversified REIT. The current investor debate centers on whether the sharp recovery in the share price reflects genuine operating inflection or merely multiple re-rating: Q1 2026 delivered a narrow profit ($11M net income, $0.05 EPS) after a deeply lossy 2025 that included a $205M fourth-quarter net loss, while revenue slipped 1.3% year over year. Bulls point to improving sequential profitability, a 13.5% dividend yield, and a discount-to-book valuation; bears point to a 0.28 current ratio, thin interest coverage, and a payout ratio that is not covered by earnings, keeping the stock a high-beta, rate- and travel-cycle-sensitive name.…
PK
Park Hotels & Resorts
$16.65
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Investment Opinion: Should I buy PK Today?
Rating: Hold. The core thesis is that PK has already re-rated to consensus fair value — the $16.35 average analyst target equals the current $16.35 price, implying 0% upside — after a 46.5% one-year and 51.8% YTD run, so investors are now paying for a recovery that has yet to show up in revenue (-1.27% YoY in Q1 2026). The consensus recommendation of "buy" (mean 2.5) is softer than it appears, with most recent actions at Equal Weight/Neutral and a Barclays downgrade in April 2026.
Supporting the Hold are four data points: (1) valuation is split — P/B of 0.66x and PS of 0.82x are cheap on assets and sales, but EV/EBITDA of 18.3x and forward PE of 28.1x are expensive versus the 10-13x lodging REIT norm; (2) profitability is inflecting sequentially (+$11M net income in Q1 2026 from -$57M a year earlier) but trailing net margin is still -11.1% and ROE is -9.0%; (3) free cash flow is weak at $69M TTM (~3.3% FCF yield) and Q1 2026 FCF was negative $24M; (4) the 13.5% dividend yield is not covered by earnings (payout ratio -0.99), making it dependent on balance-sheet capacity. The 0.66x P/B asset discount is the strongest argument for owning the stock, but it has coexisted with a near-doubling share price because book value eroded from losses.
The biggest risks that could invalidate even a Hold are a dividend cut, a refinancing at higher rates given 1.36x debt-to-equity and 1.33x interest coverage, and a RevPAR rollover that stalls the EBITDA inflection. This Hold would upgrade to Buy if revenue growth turns positive and EV/EBITDA compresses below 14x on rising EBITDA, or if asset sales visibly deleverage the balance sheet and secure the dividend; it would downgrade to Sell if revenue declines accelerate below -3% YoY, interest coverage falls toward 1.0x, or the payout is cut. Verdict: fairly valued relative to consensus and history — cheap on assets, expensive on cash flow — with the stock near the top of its 52-week range and little margin for disappointment.
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PK 12-Month Price Forecast
Wall Street consensus
Most Wall Street analysts maintain a constructive view on Park Hotels & Resorts's 12-month outlook, with a consensus price target around $16.53 and implied upside of -0.7% versus the current price.
Average Target
$16.53
0 analysts
Implied Upside
-0.7%
vs. current price
Analyst Count
—
covering this stock
Price Range
$13 - $21
Analyst target range
Coverage is solid, with 17 analysts and a consensus recommendation of "buy" (mean rating 2.5 on a scale where lower is more bullish, implying a split between Buy and Hold). The average target price of $16.35 is essentially identical to the current $16.35 price, implying roughly 0% upside — the stock has run to consensus fair value, which is a neutral-to-cautious signal after a 46.5% one-year gain. Consensus estimates call for forward EPS of $0.57 (range $0.47-$0.67) on average revenue of $2.64B (range $2.53B-$2.70B), consistent with the forward PE of 28x and suggesting analysts expect modest EBITDA recovery but not a dramatic reacceleration. The distribution of ratings and the unchanged nature of most recent actions — Wells Fargo, Barclays, Morgan Stanley, and Cantor all at Equal Weight/Neutral, Truist at Hold, with only Ladenburg Thalmann at Buy — indicates the sell side is broadly balanced rather than enthusiastically bullish. The target range of $13.00 to $20.50 is wide, spanning roughly -20% to +25% from the current price, which signals genuine disagreement about the durability of the travel recovery and the balance sheet. The high target of $20.50 likely assumes multiple expansion on successful refinancing, asset-sale proceeds deleveraging the balance sheet, and EBITDA growth toward pre-2025 levels; the low target of $13.00 likely prices in margin compression, elevated interest costs, and a dividend cut or equity raise. Institutional ratings show a mild negative drift — Barclays downgraded from Overweight to Equal Weight in April 2026 — with no recent upgrades, suggesting sentiment has cooled even as the price has risen; the wide spread and flat average target argue for treating the consensus as fairly valued rather than offering a margin of safety.
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Bulls vs Bears: PK Investment Factors
The bear case currently has stronger evidence on fundamentals — flat revenue (-1.27% YoY), a 0.28 current ratio, ~1.33x interest coverage, and an uncovered 13.5% dividend — while the bull case rests on momentum (+46.5% one-year, +33.4pp vs. SPY), sequential profit inflection (+$11M in Q1 2026 from -$57M a year earlier), and a 0.66x P/B asset discount. The stock has already run to consensus fair value ($16.35 average target = current price), so the easy money from multiple re-rating has likely been made. The single most important tension is whether the Q1 2026 swing to positive net income represents a genuine EBITDA inflection or a one-quarter artifact — if EBITDA normalizes toward 2024 levels, the 18.3x EV/EBITDA compresses and the equity is cheap; if it stalls, the multiple has room to fall toward the 10-13x peer range. Until revenue growth turns positive or the balance sheet is visibly deleveraged via asset sales, the risk/reward is balanced at best.
Bullish
- Powerful momentum with idiosyncratic relative strength: PK is up 46.5% over one year and 51.8% YTD, outperforming SPY by 33.4 and 40.4 percentage points respectively. At $16.35 the stock sits at roughly 89% of its 52-week range ($9.84-$17.14), and the higher-lows structure from the April base near $10.76 through the October push to $16.99 is a textbook accumulation pattern rather than a speculative spike.
- Sequential profitability inflection underway: Net income moved from -$57M in Q1 2025 to -$5M, -$16M, -$205M (including a $300M other-expense hit), and then back to +$11M in Q1 2026. EBITDA of $128M on $622M revenue implies a 20.6% EBITDA margin, and operating income of $68M in Q1 2026 versus just $7M in Q1 2025 shows real operating leverage returning.
- Deep asset discount at 0.66x book: Price-to-book of 0.66x means the market values PK's 20,467-room upper-upscale portfolio below stated book value, and PS of 0.82x is near the low end of its historical band (3.4x-5.8x in 2024, 9.6x-15.1x in 2021). For an asset-heavy hotel REIT, this is a classic recovery-optionality setup where the equity is a call option on EBITDA normalization.
- 13.5% dividend yield with asset-sale optionality: The dividend yield of 13.5% is extraordinary for a gateway-market hotel owner, and PK's strategy of selling international and lower-quality US assets to concentrate on high-RevPAR flagships provides a deleveraging lever. Asset-sale proceeds can simultaneously reduce the 1.36x debt-to-equity burden and support the payout.
Bearish
- Revenue stagnation undermines the recovery story: Q1 2026 revenue of $622M fell 1.27% year over year from $630M, extending a flat-to-declining pattern across the trailing four quarters ($672M, $610M, $629M, $622M). PK is not growing its way to higher earnings, so the entire thesis rests on margin capture and capital allocation rather than top-line acceleration.
- Balance sheet is the binding constraint: A current ratio of just 0.28, debt-to-equity of 1.36x, and $190M cash against $83M of quarterly capex mean PK depends on refinancing and asset-sale proceeds rather than internal cash generation. Interest expense of $51M against $68M of operating income implies roughly 1.33x interest coverage — a thin cushion if RevPAR softens.
- Dividend is not covered by earnings: The 13.5% yield comes with a payout ratio of -0.99, meaning the dividend is funded partly from balance-sheet capacity rather than earnings. Q1 2026 free cash flow was negative $24M after $83M of capex and $50M of dividends, and TTM FCF of $69M against a ~$2.08B market cap is only a ~3.3% FCF yield — well below the headline dividend yield.
- Valuation is rich on cash flow, cheap only on assets: EV/EBITDA of 18.3x is well above the 10-13x range typical of lodging REITs, and forward PE of 28.1x requires consensus EPS of $0.57 versus a trailing loss of -$0.136. The market is paying for recovery optionality, leaving room for multiple compression toward peer norms if EBITDA fails to inflect.
PK Technical Analysis
Park Hotels is in a powerful, sustained uptrend: the stock is up 46.5% over the past year and 51.8% year to date, and at $16.35 it sits at roughly 89% of its 52-week range (low $9.84, high $17.14). That positioning near the top of the range signals strong momentum but also leaves little margin for disappointment — the stock is trading just 4.6% below its 52-week high, meaning buyers have consistently absorbed supply on pullbacks. Relative strength confirms the move is idiosyncratic rather than market-driven: PK has outperformed SPY by 33.4 percentage points over one year and 40.4 points year to date, versus SPY's 13.1% and 11.5% gains respectively. The trend structure — higher lows from the April base near $10.76-$11.23 through the October push to $16.99 — is a textbook accumulation pattern rather than a sharp spike, which argues against pure overextension. Recent momentum is positive but decelerating at the margin: the stock gained 8.5% over the past month and 10.9% over three months, both well ahead of SPY's -1.0% and +2.9%, yet the 1-month gain is smaller than the 6-month gain of 46.0%, indicating the pace of advance has cooled from the explosive May-June leg (when the stock ran from ~$11.50 to ~$14.70 in roughly six weeks). The last two sessions show a modest pullback — a 1.86% decline on the latest day to $16.35 from a $16.66 prior close, after tagging $16.99 on October 21 — which looks like normal profit-taking after a fresh 52-week-high test rather than a trend break. Volume of 4.6M shares and a short ratio of 9.53 days suggest a meaningful short base that could fuel further squeezes on strength, though it also flags persistent bearish conviction. Key levels are well defined: support sits at the 52-week low of $9.84, with intermediate support in the $15.15-$15.40 shelf that contained the September consolidation, while resistance is the 52-week high of $17.14. A clean breakout above $17.14 would confirm the multi-month uptrend and likely trigger short covering toward new highs, whereas a breakdown below $15.15 would break the October uptrend line and expose the $14.30-$14.50 August gap area. With a beta of 1.368, PK is roughly 37% more volatile than the market, and its max drawdown of -18.88% underscores that position sizing should account for amplified moves in both directions.
Beta
1.37
1.37x market volatility
Max Drawdown
-15.5%
Largest decline past year
52-Week Range
$10-$17
Price range past year
Annual Return
+50.5%
Cumulative gain past year
| Period | PK Return | S&P 500 |
|---|---|---|
| 1m | +5.9% | +0.9% |
| 3m | +10.6% | +4.1% |
| 6m | +46.7% | +7.2% |
| 1y | +50.5% | +12.4% |
| ytd | +54.6% | +13.3% |
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PK Fundamental Analysis
Revenue is essentially flat-to-slightly-declining: Q1 2026 revenue of $622M fell 1.27% year over year from $630M in Q1 2025, extending a pattern of stagnation across the trailing four quarters ($672M in Q2 2025, $610M in Q3 2025, $629M in Q4 2025, $622M in Q1 2026). The segment mix shows rooms revenue (occupancy) at $356M, food and beverage at $182M, ancillary hotel at $60M, and other hotel revenue at $24M — a conventional lodging mix in which rooms drive roughly 57% of the total, so RevPAR trends in gateway markets are the swing factor. The growth trend implies a mature, asset-recycling story rather than a growth story: PK is not expanding its way to higher revenue, so the investment case hinges on margin capture and capital allocation (asset sales, buybacks, debt reduction) rather than top-line acceleration. Profitability is thin and volatile: Q1 2026 net income was $11M (net margin 1.77%) on a gross margin of just 7.4%, a dramatic compression from the 26-32% gross margins reported in 2024-2025 quarters, though the reported gross profit line for lodging REITs is distorted by cost-of-revenue classification and should be read alongside the 20.6% EBITDA margin ($128M EBITDA on $622M revenue). The trailing picture is ugly — a Q4 2025 net loss of $205M (including a $300M other-expense hit) dragged trailing EPS to -$0.136 and net margin to -11.1% — but the sequential trajectory is improving, with net income moving from -$57M (Q1 2025) to -$5M, -$16M, -$205M, and then back to +$11M in Q1 2026. Operating margin of 8.9% and interest expense of $51M against $68M of operating income highlight how heavily the capital structure weighs on the P&L; interest coverage of roughly 1.33x leaves little cushion. The balance sheet is the key risk: debt-to-equity of 1.36x, a current ratio of just 0.28, and cash of $190M against $83M of quarterly capex mean the company depends on refinancing and asset-sale proceeds rather than internal cash generation. Free cash flow is weak — TTM FCF of $69M against a $2.08B market cap implies a roughly 3.3% FCF yield, and Q1 2026 FCF was negative $24M after $83M of capex and $50M of dividends. ROE of -9.0% and ROA of 2.7% confirm that returns are being suppressed by leverage and depreciation; the dividend, yielding 13.5%, is not covered by earnings (payout ratio -0.99) and is being funded partly from balance-sheet capacity, which is sustainable only if operating cash flow improves.
Quarterly Revenue
$622000000.0B
2026-03
Revenue YoY Growth
-1.3%
YoY Comparison
Gross Margin
7.4%
Latest Quarter
Free Cash Flow
$69000000.0B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
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Valuation Analysis: Is PK Overvalued?
Because trailing net income is negative (EPS -$0.136), the trailing PE of -7.37x is not meaningful, so the primary metric is the forward PE of 28.07x, supported by EV/EBITDA of 18.34x and price-to-book of 0.66x. The gap between the negative trailing multiple and the 28x forward multiple implies the market expects a sharp earnings recovery — consensus forward EPS of $0.57 versus a trailing loss — which is a demanding bar for a REIT with flat revenue. For an asset-heavy hotel REIT, price-to-book of 0.66x and EV/EBITDA of 18.3x are the more informative anchors: the sub-1.0x P/B signals the market values the portfolio below stated book, while the 18.3x EV/EBITDA is rich relative to the 10-13x range typical of lodging REITs and implies investors are paying for recovery optionality rather than current cash flow. Peer comparison is constrained by the absence of a supplied industry-average multiple set, but the internal evidence is telling: PS of 0.82x and P/B of 0.66x are cheap on asset and sales bases, while EV/EBITDA of 18.3x and forward PE of 28.1x are expensive on earnings and cash-flow bases — a split that is characteristic of a leveraged, low-margin REIT whose equity is a call option on EBITDA recovery. The PEG ratio of 0.03 is distorted by the near-zero earnings base and should be disregarded. Historically, PK's own valuation band has compressed dramatically: PS was 3.4x-5.8x in 2024 and 9.6x-15.1x in 2021, versus 0.82x today, and P/B has fallen from roughly 0.97x in Q1 2024 to 0.66x now, even as the stock price has nearly doubled — a paradox explained by book value erosion from losses. The stock is therefore near the low end of its historical P/B and PS bands despite trading near 52-week highs, which suggests the market is pricing in recovery from a depressed earnings base rather than euphoria; the risk is that if EBITDA fails to inflect, the 18.3x EV/EBITDA multiple has room to compress toward peer norms.
PE
-7.4x
Latest Quarter
vs. Historical
Low-End
5-Year PE Range 4x~34x
vs. Industry Avg
N/A
Industry PE ~N/A*
EV/EBITDA
18.3x
Enterprise Value Multiple
Investment Risk Disclosure
Financial and operational risks are concentrated in the capital structure. Debt-to-equity of 1.36x, a current ratio of 0.28, and $190M cash against $83M of quarterly capex mean PK cannot fund itself internally and depends on refinancing and asset-sale proceeds. Interest expense of $51M against $68M of operating income gives roughly 1.33x interest coverage, so a modest RevPAR decline would push coverage toward 1.0x. The dividend is not covered by earnings (payout ratio -0.99), Q1 2026 FCF was negative $24M, and TTM FCF of $69M implies only a ~3.3% FCF yield against a 13.5% headline yield — a gap that must close via EBITDA growth or the payout gets cut. Revenue concentration in rooms (roughly 57% of the $622M quarterly total at $356M) and in Hilton-branded gateway-market assets means a single demand shock — group cancellations, a business-travel slowdown, or a brand dispute — hits the top line directly.
Market and competitive risks center on valuation compression and rate sensitivity. EV/EBITDA of 18.3x sits well above the 10-13x lodging REIT norm, and forward PE of 28.1x prices in consensus EPS of $0.57 versus a trailing loss, so any EBITDA disappointment leaves the multiple exposed. Beta of 1.368 makes PK roughly 37% more volatile than the market, and as a leveraged REIT it is acutely sensitive to interest rates — elevated rates raise refinancing costs on the debt stack and compress REIT multiples simultaneously. The sell side has cooled: Barclays downgraded from Overweight to Equal Weight in April 2026, the mean rating of 2.5 implies a Buy/Hold split, and the average target of $16.35 equals the current price, offering no cushion. Competition from newer supply in gateway markets and from alternative lodging formats could cap RevPAR growth even in a healthy travel environment.
The worst-case scenario is a travel-demand rollover coinciding with a refinancing wall: RevPAR declines compress EBITDA below the $128M quarterly run rate, interest coverage falls toward 1.0x, the uncovered dividend is cut, and the equity de-rates from 18.3x toward 10-13x EV/EBITDA. In that chain, the stock would retest its 52-week low of $9.84 — a decline of roughly 40% from the current $16.35 — and the analyst low target of $13.00 (-20%) would likely prove too optimistic. The historical max drawdown of -18.88% understates this tail because it captures only the recent window; a full de-rating plus a dividend cut could plausibly take the stock to the $10-$13 range, implying -20% to -40% downside. Position sizing should reflect that PK is a high-beta, rate- and cycle-sensitive name trading near the top of its range with limited fundamental margin for error.