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Hyatt Hotels (H): Is a Beat in the Cards in Q4 Earnings?
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Leading global hospitality company, Hyatt Hotels Corporation (H - Free Report) , is scheduled to report fourth-quarter and full-year 2016 results on Feb 16, before the opening bell. We expect the company to surpass expectations.
Last quarter, Hyatt Hotels posted a positive earnings surprise of 67.86%. In fact, the company’s earnings surpassed the Zacks Consensus Estimate in three of the last four quarters, with an average beat of 24.67%.
Our proven model shows that Hyatt Hotels is likely to beat on earnings because it has the perfect combination of the two key ingredients.
Zacks ESP: Earnings ESP for Hyatt Hotels is +12.50% because the Most Accurate estimate stands at 27 cents, while the Zacks Consensus Estimate is pegged at 24 cents. This is a meaningful indicator for a likely positive earnings surprise. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Hyatt Hotels currently has a Zacks Rank #3 (Hold). Note that stocks with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 have a significantly higher chance of beating earnings estimates.
Conversely, Sell-rated stocks (Zacks Rank #4 or 5) should never be considered going into an earnings announcement.
The combination of Hyatt Hotels’ favorable Zacks Rank and positive Earnings ESP makes us reasonably confident of an earnings beat.
What is Driving the Better-than-Expected Earnings?
Hyatt Hotels stands to gain from increased demand in the U.S., which is supported by stronger economic metrics and the increasingly positive employment scenario in the country. Moreover, improved transient demand and greater pricing power have been driving Revenue per Available Room (RevPAR) over the past few quarters. We expect the trend to have continued in the fourth quarter as well.
Further, the company continues to gain from increasing market share and large-scale development. In the third quarter, the company opened 11 new hotels globally and is expected to open 20 more in the to-be-reported quarter. Additionally, comparatively untapped and growing markets like China, India and Eastern Europe continue to be areas of regional strength for the company and are expected to bolster growth. These endeavors look to fortify the brand’s presence in growing markets and add to the top line.
However, management noted that booking pace for the fourth quarter was slightly down from the last year, reflecting a challenging quarter that includes both the Jewish holidays and the US Presidential Election. Further, pressure on margins due to lower nominal growth in RevPAR weakening business transient travel, continued weakness in France exacerbated by the impact of renovations, concerns regarding the spread of the Zika virus, and negative currency translations, could mar the quarter’s performance.
Stocks to Consider
Hyatt Hotels is not the only company looking up this earnings season. Here are some other hotel companies to consider as our model shows they also have the right combination of elements to post an earnings beat this quarter:
Marriott International, Inc. (MAR - Free Report) has an Earnings ESP of +2.41% and a Zacks Rank #3.
Wyndham Worldwide Corporation has an Earnings ESP of +2.31% and a Zacks Rank #3.
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Our experts cover all kinds of trades… from value to momentum . . . from stocks under $10 to ETF and option moves . . . from stocks that corporate insiders are buying up to companies that are about to report positive earnings surprises. You can even look inside exclusive portfolios that are normally closed to new investors. Starting today, for the next month, you can have unrestricted access. Click here for Zacks' private trades >>
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Hyatt Hotels (H): Is a Beat in the Cards in Q4 Earnings?
Leading global hospitality company, Hyatt Hotels Corporation (H - Free Report) , is scheduled to report fourth-quarter and full-year 2016 results on Feb 16, before the opening bell. We expect the company to surpass expectations.
Last quarter, Hyatt Hotels posted a positive earnings surprise of 67.86%. In fact, the company’s earnings surpassed the Zacks Consensus Estimate in three of the last four quarters, with an average beat of 24.67%.
Hyatt Hotels Corporation Price and EPS Surprise
Hyatt Hotels Corporation Price and EPS Surprise | Hyatt Hotels Corporation Quote
Why a Likely Positive Surprise?
Our proven model shows that Hyatt Hotels is likely to beat on earnings because it has the perfect combination of the two key ingredients.
Zacks ESP: Earnings ESP for Hyatt Hotels is +12.50% because the Most Accurate estimate stands at 27 cents, while the Zacks Consensus Estimate is pegged at 24 cents. This is a meaningful indicator for a likely positive earnings surprise. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Hyatt Hotels currently has a Zacks Rank #3 (Hold). Note that stocks with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 have a significantly higher chance of beating earnings estimates.
Conversely, Sell-rated stocks (Zacks Rank #4 or 5) should never be considered going into an earnings announcement.
The combination of Hyatt Hotels’ favorable Zacks Rank and positive Earnings ESP makes us reasonably confident of an earnings beat.
What is Driving the Better-than-Expected Earnings?
Hyatt Hotels stands to gain from increased demand in the U.S., which is supported by stronger economic metrics and the increasingly positive employment scenario in the country. Moreover, improved transient demand and greater pricing power have been driving Revenue per Available Room (RevPAR) over the past few quarters. We expect the trend to have continued in the fourth quarter as well.
Further, the company continues to gain from increasing market share and large-scale development. In the third quarter, the company opened 11 new hotels globally and is expected to open 20 more in the to-be-reported quarter. Additionally, comparatively untapped and growing markets like China, India and Eastern Europe continue to be areas of regional strength for the company and are expected to bolster growth. These endeavors look to fortify the brand’s presence in growing markets and add to the top line.
However, management noted that booking pace for the fourth quarter was slightly down from the last year, reflecting a challenging quarter that includes both the Jewish holidays and the US Presidential Election. Further, pressure on margins due to lower nominal growth in RevPAR weakening business transient travel, continued weakness in France exacerbated by the impact of renovations, concerns regarding the spread of the Zika virus, and negative currency translations, could mar the quarter’s performance.
Stocks to Consider
Hyatt Hotels is not the only company looking up this earnings season. Here are some other hotel companies to consider as our model shows they also have the right combination of elements to post an earnings beat this quarter:
Extended Stay America, Inc. has an Earnings ESP of +21.43% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Marriott International, Inc. (MAR - Free Report) has an Earnings ESP of +2.41% and a Zacks Rank #3.
Wyndham Worldwide Corporation has an Earnings ESP of +2.31% and a Zacks Rank #3.
Zacks’ Best Private Investment Ideas
In addition to the recommendations that are available to the public on our website, how would you like to follow all Zacks' private buys and sells in real time?
Our experts cover all kinds of trades… from value to momentum . . . from stocks under $10 to ETF and option moves . . . from stocks that corporate insiders are buying up to companies that are about to report positive earnings surprises. You can even look inside exclusive portfolios that are normally closed to new investors. Starting today, for the next month, you can have unrestricted access. Click here for Zacks' private trades >>