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Host Hotels (HST) to Report Q1 Earnings: What's in Store?
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Host Hotels & Resorts, Inc. (HST - Free Report) is slated to report first-quarter 2018 results after the market closes on May 2.
In the last-reported quarter, this Bethesda, MD-based lodging real estate investment trust (REIT) delivered a positive surprise of around 7.7%, with respect to funds from operations (FFO) per share. Results highlighted margin improvement through better productivity.
The company has a decent surprise history. In fact, over the preceding four quarters, the company posted surprises in three occasions, with an average beat of 6.8%. This is depicted in the graph below:
Host Hotels & Resorts, Inc. Price and EPS Surprise
Let’s see how things are shaping up for this announcement.
Factors That Might Impact Q1 Results
Host Hotels boasts a portfolio of upscale hotels across potential markets in the United States. Also, the company is making concerted efforts to enhance its portfolio quality through strategic capital-recycling program. The lodging REIT has been making well-planned redevelopments to fortify its position in vibrant markets.
Moreover, the company is enhancing its portfolio with strategic assets like the three Hyatt-managed hotels, while monetizing a considerable part of real estate in Washington D.C. and lowering its exposure in New York.
Host Hotels also has a decent balance sheet and ample liquidity. The company’s Q1 performance is expected to display improvement in productivity at many of its hotels.
However, though supply growth has been sluggish in the past, it has gathered momentum, of late. In fact, growth is expected to remain elevated in 2018, particularly in markets where the company has exposure.
Moreover, in the fourth-quarter 2017 conference call, management had stated that the company’s performance is likely to be the weakest in first-quarter 2018. This is due to tough comparisons resulting from inauguration and Women's March in D.C. last year as well as Easter weekend beginning on Mar 30 this year.
Notably, the company usually reaps 23-24% of its total EBITDA in the Jan-Mar quarter. In addition to this, dilutive impact of asset sales cannot be bypassed. Also, rate hike is another key concern for this REIT.
Amid these, the Zacks Consensus Estimate for first-quarter revenues is pegged at $1.32 billion, indicating an expected decline of 1.9% year over year. The Zacks Consensus Estimate for Room Revenues is pegged at $824 million, down from $847 million reported in the prior quarter. The Food and Beverage revenues estimate is pegged at $413 million which is slightly above the $409 million generated in the prior quarter.
In fact, there was lack of any solid catalyst for being positive on the stock. Therefore, in a month’s time, the Zacks Consensus Estimate of FFO per share for the first quarter remained unchanged at 40 cents. The figure denotes an estimated decrease of 9.1% year over year.
However, Host Hotels’ shares have gained 8.0% over the past month, outperforming 2.3% growth recorded by its industry.
Earnings Whispers
Our proven model does not conclusively show that Host Hotels will likely beat estimates this season. This is because a stock needs to have both — a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or at least 3 (Hold) — for this to happen. However, that is not the case here as you will see below.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks ESP: The company has an Earnings ESP of -2.99%.
Zacks Rank: Host Hotels’ Zacks Rank #3 increases the predictive power of ESP. However, we also need to have a positive ESP to be confident of a positive surprise.
Stocks That Warrant a Look
Here are a few stocks in the REIT space that you may want to consider, as our model shows that these have the right combination of elements to report a positive surprise this time around:
HCP Inc. (HCP - Free Report) , scheduled to report quarterly numbers on May 3, has an Earnings ESP of +0.22% and a Zacks Rank #3.
Sabra Health Care REIT, Inc. (SBRA - Free Report) , set to release first-quarter results on May 9, has an Earnings ESP of +1.36% and a Zacks Rank of 3.
Note: Anything related to earnings presented in this write-up represent funds from operations (FFO) — a widely used metric to gauge the performance of REITs.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
Image: Bigstock
Host Hotels (HST) to Report Q1 Earnings: What's in Store?
Host Hotels & Resorts, Inc. (HST - Free Report) is slated to report first-quarter 2018 results after the market closes on May 2.
In the last-reported quarter, this Bethesda, MD-based lodging real estate investment trust (REIT) delivered a positive surprise of around 7.7%, with respect to funds from operations (FFO) per share. Results highlighted margin improvement through better productivity.
The company has a decent surprise history. In fact, over the preceding four quarters, the company posted surprises in three occasions, with an average beat of 6.8%. This is depicted in the graph below:
Host Hotels & Resorts, Inc. Price and EPS Surprise
Host Hotels & Resorts, Inc. Price and EPS Surprise | Host Hotels & Resorts, Inc. Quote
Let’s see how things are shaping up for this announcement.
Factors That Might Impact Q1 Results
Host Hotels boasts a portfolio of upscale hotels across potential markets in the United States. Also, the company is making concerted efforts to enhance its portfolio quality through strategic capital-recycling program. The lodging REIT has been making well-planned redevelopments to fortify its position in vibrant markets.
Moreover, the company is enhancing its portfolio with strategic assets like the three Hyatt-managed hotels, while monetizing a considerable part of real estate in Washington D.C. and lowering its exposure in New York.
Host Hotels also has a decent balance sheet and ample liquidity. The company’s Q1 performance is expected to display improvement in productivity at many of its hotels.
However, though supply growth has been sluggish in the past, it has gathered momentum, of late. In fact, growth is expected to remain elevated in 2018, particularly in markets where the company has exposure.
Moreover, in the fourth-quarter 2017 conference call, management had stated that the company’s performance is likely to be the weakest in first-quarter 2018. This is due to tough comparisons resulting from inauguration and Women's March in D.C. last year as well as Easter weekend beginning on Mar 30 this year.
Notably, the company usually reaps 23-24% of its total EBITDA in the Jan-Mar quarter. In addition to this, dilutive impact of asset sales cannot be bypassed. Also, rate hike is another key concern for this REIT.
Amid these, the Zacks Consensus Estimate for first-quarter revenues is pegged at $1.32 billion, indicating an expected decline of 1.9% year over year. The Zacks Consensus Estimate for Room Revenues is pegged at $824 million, down from $847 million reported in the prior quarter. The Food and Beverage revenues estimate is pegged at $413 million which is slightly above the $409 million generated in the prior quarter.
In fact, there was lack of any solid catalyst for being positive on the stock. Therefore, in a month’s time, the Zacks Consensus Estimate of FFO per share for the first quarter remained unchanged at 40 cents. The figure denotes an estimated decrease of 9.1% year over year.
However, Host Hotels’ shares have gained 8.0% over the past month, outperforming 2.3% growth recorded by its industry.
Earnings Whispers
Our proven model does not conclusively show that Host Hotels will likely beat estimates this season. This is because a stock needs to have both — a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or at least 3 (Hold) — for this to happen. However, that is not the case here as you will see below.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks ESP: The company has an Earnings ESP of -2.99%.
Zacks Rank: Host Hotels’ Zacks Rank #3 increases the predictive power of ESP. However, we also need to have a positive ESP to be confident of a positive surprise.
Stocks That Warrant a Look
Here are a few stocks in the REIT space that you may want to consider, as our model shows that these have the right combination of elements to report a positive surprise this time around:
Essex Property Trust, Inc. (ESS - Free Report) , slated to release earnings on May 2, has an Earnings ESP of +0.05% and a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.
HCP Inc. (HCP - Free Report) , scheduled to report quarterly numbers on May 3, has an Earnings ESP of +0.22% and a Zacks Rank #3.
Sabra Health Care REIT, Inc. (SBRA - Free Report) , set to release first-quarter results on May 9, has an Earnings ESP of +1.36% and a Zacks Rank of 3.
Note: Anything related to earnings presented in this write-up represent funds from operations (FFO) — a widely used metric to gauge the performance of REITs.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>