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Research Alert: Hlt: Strong Q1 Results Offset By Weak Q2 Profit Outlook

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-- CFRA, an independent research provider, has providedwith the following research alert. Analysts at CFRA have summarized their opinion as follows:

HLT posted Q1 adj. EPS of $2.01 (+16.8% Y/Y), beating the $1.97 consensus, while total revenue of $2.94B (+9.0% Y/Y) was in line with estimates. Revenue per available room (RevPAR) growth accelerated 110 bps to +3.6%, led by occupancy gains (+140 bps to 67.4%) and average daily rate increases (+1.5% Y/Y), with broad-based strength across regions led by Europe (+6.9%) and Asia Pacific (+4.7%). Development momentum remained robust with 26,200 new rooms approved and the launch of Select by Hilton expanding into 26 new countries, positioning HLT well for continued growth. Despite raising systemwide RevPAR guidance to 2%-3% from 1%-2%, Q2 adj. EBITDA guidance ($1,015M-$1,035M) disappointed vs. the $1,081M consensus. We view the profit guidance as disappointing given the raised RevPAR outlook, suggesting consensus estimates could be too high. In our view, while strong demand trends and World Cup benefits could drive RevPAR outperformance, the guidance disconnect raises concerns about margin expansion potential.

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UAE Exit From OPEC, OPEC+ Removes Key Pillar of Market Control, Rystad Energy Says

The United Arab Emirates's departure from the Organization of the Petroleum Exporting Countries and OPEC+ removes a key pillar supporting the group's ability to manage global oil markets, Rystad Energy said in a note Tuesday."Losing a member with 4.8 million barrels per day of capacity, and the ambition to produce more, takes a real tool out of the group's hands," analyst Jorge Leon said.The timing also signals where the oil market is heading. With demand nearing a peak, the calculation for producers with low-cost barrels is quickly changing, and waiting under a quota system can start to look like leaving money on the table, he added.As a result, Saudi Arabia is left doing more of the heavy lifting to maintain price stability, while the market loses one of its remaining shock absorbers, Leon said.In the short term, the impact may be limited due to ongoing disruption in the Strait of Hormuz and overall geopolitical tensions but the longer term effects would be more consequential. "A structurally weaker OPEC, with less spare capacity concentrated within the group, will find it increasingly difficult to calibrate supply and stabilize prices," the analyst said.The UAE is set to leave OPEC and OPEC+ on May 1, the Emirates News Agency said earlier Tuesday.