Hilton Shares Up On Takeover Speculation

Chron:

NEW YORK — Shares of Hilton Hotels Corp. reached a fresh 52-week high for the second day in a row Wednesday after a report suggested the company may be an acquisition target.

Shares of Hilton gained $1.07, or 3.3 percent, to $33.94 in afternoon trading on the New York Stock Exchange, down from its high of $34.05 earlier in the session. The shares had been trading in a 52-week range between $21.19 and $33.26.

Hilton, which owns and operates hotels and vacation properties worldwide, may be an attractive purchase because it is no longer considered “too big,” a report in The Wall Street Journal said Wednesday. The company’s share have climbed more than 33 percent in the past three months, pushing its market value to nearly $13 billion.

Analyst J. Cogan of Banc of America Securities reaffirmed his support for Hilton in a Tuesday client note, backing the company’s strategy.

“Decreasing the mix of owned-hotel cash flow while increasing the percentage of EBITDA generated by managing/franchising hotels, plus timeshare, should make Hilton less asset intensive, less cyclical,” he wrote.

Cogan is keeping Hilton as one of his top picks and maintaining a “Buy” rating with a $40 price target.