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What Should You Expect from Hyatt (H) this Earnings Season?

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Hyatt Hotels Corporation (H - Free Report) is scheduled to report second-quarter 2017 results on Aug 3, before the opening bell.

Last quarter, Hyatt pulled off a positive earnings surprise of 204.17%. In fact, the company’s earnings surpassed the Zacks Consensus Estimate in each of the last four quarters, with an average beat of 83.00%.

Let’s see how things are shaping up for this announcement.

Hyatt Hotels Corporation Price and EPS Surprise

 

Factors Likely to Influence Q2

Hyatt’s second-quarter results are expected to be positively impacted by the company’s efforts to continue gaining market share globally on its solid brand portfolio, continuous expansion, and innovative and exceptional personalized service to guests. Last quarter, the company launched its remodeled loyalty program that should aid in boosting occupancy.

Additionally, Hyatt stands to gain from increased demand in the U.S. that is supported by stronger economic metrics and the increasingly positive employment scenario in the country.

Moreover, improved leisure and business travel demand as well as greater pricing power have been driving Revenue per Available Room (RevPAR) for the last few quarters. We expect the trend to have continued in the second quarter as well.

However, lingering global uncertainty in certain economies, particularly the Middle East and China, is likely to limit revenue growth. Further, tough business conditions in and recent terror assaults in key European cities have also affected tourism. Challenging market dynamics and ongoing renovations in France are expected to continue hurting revenues of the company too.

Additionally, negative currency translation is anticipated to reduce the value of overseas sales, given Hyatt’s significant international presence, thereby hurting revenues and profits in the to-be-reported quarter.

Earnings Whispers

Our proven model does not conclusively show an earnings beat for Hyatt 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. Unfortunately, that is not the case here as elaborated below.

Zacks ESP: Hyatt has an Earnings ESP of 0.00%. This is because the Most Accurate estimate and the Zacks Consensus Estimate are pegged at 35 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Hyatt has a Zacks Rank #3. This when combined with 0.00% 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 other companies in the Consumer Discretionary sector to consider as our model shows they also have the right combination of elements to post an earnings beat this quarter:

Time Warner Inc. has an Earnings ESP of +1.68% and a Zacks Rank #2.

Norwegian Cruise Line Holdings Ltd. (NCLH - Free Report) has an Earnings ESP of +1.03% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

AMC Networks Inc. (AMCX - Free Report) has an Earnings ESP of +1.42% and a Zacks Rank #3.

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