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What Should You Expect from Hyatt Hotels (H) in Q1 Earnings?
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Leading global hospitality company, Hyatt Hotels Corporation (H - Free Report) is scheduled to report first-quarter 2017 results on May 4, before the opening bell.
Last quarter, Hyatt Hotels posted a positive earnings surprise of 20.83%. In fact, the company’s earnings surpassed the Zacks Consensus Estimate in all of the last four quarters, with an average beat of 33%.
Let’s see how things are shaping up for this announcement.
Factors to Consider
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 somewhat driving Revenue per Available Room (RevPAR) over the past few quarters. We expect the trend to have continued in the first quarter as well.
Further, the company continues to gain from increasing market share and large-scale development activities. In fact, the company has gained market share globally for the past eight consecutive quarters. 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, pressure on margins due to lower nominal growth in RevPAR, continued weakness in France exacerbated by the impact of renovations, geopolitical uncertainties in key operating regions, and negative currency translations, could mar the quarter’s performance.
Earnings Whispers
Our proven model does not conclusively show earnings beat for Hyatt Hotels this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here, as elaborated below.
Zacks ESP: Hyatt Hotels has an Earnings ESP of -8.33%. This is because the Most Accurate estimate is 22 cents per share and the Zacks Consensus Estimate is pegged higher at 24 cents per share. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Hyatt Hotels has a Zacks Rank #3, which increases the predictive power of ESP. However, the company’s negative ESP makes surprise prediction difficult.
Note that we caution against stocks with a Zacks Rank #4 or 5 (Sell rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks to Consider
Here are some hotel companies that investors may consider, as our model shows that they have the right combination of elements to post an earnings beat this quarter:
La Quinta Holdings Inc. has an Earnings ESP of +50% and a Zacks Rank #3.
Marriott International, Inc. (MAR - Free Report) has an Earnings ESP of +1.11% and a Zacks Rank #3.
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What Should You Expect from Hyatt Hotels (H) in Q1 Earnings?
Leading global hospitality company, Hyatt Hotels Corporation (H - Free Report) is scheduled to report first-quarter 2017 results on May 4, before the opening bell.
Last quarter, Hyatt Hotels posted a positive earnings surprise of 20.83%. In fact, the company’s earnings surpassed the Zacks Consensus Estimate in all of the last four quarters, with an average beat of 33%.
Hyatt Hotels Corporation Price and EPS Surprise
Hyatt Hotels Corporation Price and EPS Surprise | Hyatt Hotels Corporation Quote
Let’s see how things are shaping up for this announcement.
Factors to Consider
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 somewhat driving Revenue per Available Room (RevPAR) over the past few quarters. We expect the trend to have continued in the first quarter as well.
Further, the company continues to gain from increasing market share and large-scale development activities. In fact, the company has gained market share globally for the past eight consecutive quarters. 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, pressure on margins due to lower nominal growth in RevPAR, continued weakness in France exacerbated by the impact of renovations, geopolitical uncertainties in key operating regions, and negative currency translations, could mar the quarter’s performance.
Earnings Whispers
Our proven model does not conclusively show earnings beat for Hyatt Hotels this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here, as elaborated below.
Zacks ESP: Hyatt Hotels has an Earnings ESP of -8.33%. This is because the Most Accurate estimate is 22 cents per share and the Zacks Consensus Estimate is pegged higher at 24 cents per share. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Hyatt Hotels has a Zacks Rank #3, which increases the predictive power of ESP. However, the company’s negative ESP makes surprise prediction difficult.
Note that we caution against stocks with a Zacks Rank #4 or 5 (Sell rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks to Consider
Here are some hotel companies that investors may consider, as our model shows that they have the right combination of elements to post an earnings beat this quarter:
La Quinta Holdings Inc. has an Earnings ESP of +50% and a Zacks Rank #3.
Red Lion Hotels Corporation has an Earnings ESP of +3.33% and a Zacks Rank #3. 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 +1.11% and a Zacks Rank #3.
5 Trades Could Profit "Big-League" from Trump Policies
If the stocks above spark your interest, wait until you look into companies primed to make substantial gains from Washington's changing course.
Today Zacks reveals 5 tickers that could benefit from new trends like streamlined drug approvals, tariffs, lower taxes, higher interest rates, and spending surges in defense and infrastructure. See these buy recommendations now >>