Nomura Gives Hilton And Marriott A 5-Star Rating

Nomura on Thursday issued a special report highlighting, among others, Hilton Worldwide Holdings Inc HLT and Marriott International Inc MAR.

Nomura said that Hilton remains its top pick in the lodging industry. The firm stated three reasons for its high valuation of the hotel chain.

1. Corporate profit growth remains positive at 3 percent.
2. Consensus estimates of GDP growth are 3.1 percent in 2015.
3. Low US unemployment. In January of 2015 the rate was 5.7 percent.

Nomura said that Marriott has a best in class business model. Analysts at the firm were impressed by Marriott repurchasing $1,500 million of stock, lowering its share count by 8 percent. The hotel company is expected to generate class leading return on invested capital of 35 percent.

Nomura rates Hilton as a Buy with a $33 price target. The stock recently traded at $28.58, up 0.14 percent.

Nomura rates Marriott as a Buy with a price target of $84. The stock recently traded at $83.23, up 2.2 percent.