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Host Hotels (HST) to Report Q3 Earnings: What's in Store?
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Host Hotels & Resorts, Inc. (HST - Free Report) is slated to report third-quarter 2018 results after the market closes on Nov 1. The company’s results are anticipated to reflect year-over-year increase in funds from operations (FFO) per share and revenues.
In the last reported quarter, this Bethesda, MD-based lodging real estate investment trust (REIT) delivered a positive surprise of around 5.9%, with respect to funds from operations (FFO) per share.
The company has a decent surprise history. In fact, over the preceding four quarters, it posted positive surprises in three occasions, with an average beat of 4.6%. 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 to Consider
Host Hotels has a solid portfolio of upscale hotels across potential markets which are likely to witness decent demand amid improving economy, sound corporate profits and improving job market. These are likely to drive business travel and leisure trips, and thereby steer the demand for the company’s properties.
Further, the company focuses on strategic capital-recycling program. In addition, the company’s productivity-boosting efforts are encouraging and Host Hotels’ Sep-end quarter performance is expected to display improvement in productivity at many of its hotels. In addition, the company has a healthy balance sheet with ample liquidity that augurs well for its growth endeavors.
In September, Host Hotels announced the sale of the New York Marriott Marquis retail, theater, and signage commercial condominium units to Vornado Realty Trust (VNO - Free Report) , for $442 million. The company also announced selling of the W New York – Union Square, for $171 million, which was closed earlier the same month. These dispositions came as part of its efforts to lower exposure to profitability-challenged assets in the New York market which is plagued with a choppy environment amid supply increases and persistent expense inflation.
Nonetheless, though supply growth has been tepid in the past, it has gathered momentum in recent times. In fact, supply growth is expected to remain elevated in 2018 as well as in 2019, particularly in markets where the company has exposure. This is expected to impact the company’s pricing power. Also, dilutive impact of asset sales cannot be bypassed. Hike in interest rate adds to its woes.
Amid these, the Zacks Consensus Estimate for third-quarter revenues is pegged at $1.28 billion, indicating an expected year-over-year increase of 2.1%.
However, the company usually reaps 20-21% of its total adjusted EBITDA in the quarter under review and the Zacks Consensus Estimate for Room Revenues is pinned at $871 million, down from $973 million reported in the prior quarter. The Food and Beverage revenues estimate is pegged at $322 million which is below the $449 million generated in the last quarter.
Additionally, there was lack of any solid catalyst and therefore, in a month’s time, the Zacks Consensus Estimate of FFO per share for the quarter remained unrevised at 35 cents. Nevertheless, the figure denotes an estimated year-over-year rise of 6.1%.
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.
Earnings ESP: The company has an Earnings ESP of 0.00%.
Zacks Rank: Host Hotels has a Zacks Rank #4 (Sell), at present.
Stocks That Warrant a Look
Here are a few other stocks in the REIT sector that you may want to consider, as our model shows that these have the right combination of elements to report a positive surprise this quarter:
Extra Space Storage Inc. (EXR - Free Report) , slated to release third-quarter results on Oct 30, has an Earnings ESP of +0.14% and a Zacks Rank of 3.
Public Storage (PSA - Free Report) , set to report its quarterly numbers on Oct 30, has an Earnings ESP of +1.91% and a Zacks Rank #3.
Note: Anything related to earnings presented in this write-up represents funds from operations (FFO) — a widely used metric to gauge the performance of REITs.
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It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Image: Bigstock
Host Hotels (HST) to Report Q3 Earnings: What's in Store?
Host Hotels & Resorts, Inc. (HST - Free Report) is slated to report third-quarter 2018 results after the market closes on Nov 1. The company’s results are anticipated to reflect year-over-year increase in funds from operations (FFO) per share and revenues.
In the last reported quarter, this Bethesda, MD-based lodging real estate investment trust (REIT) delivered a positive surprise of around 5.9%, with respect to funds from operations (FFO) per share.
The company has a decent surprise history. In fact, over the preceding four quarters, it posted positive surprises in three occasions, with an average beat of 4.6%. 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 to Consider
Host Hotels has a solid portfolio of upscale hotels across potential markets which are likely to witness decent demand amid improving economy, sound corporate profits and improving job market. These are likely to drive business travel and leisure trips, and thereby steer the demand for the company’s properties.
Further, the company focuses on strategic capital-recycling program. In addition, the company’s productivity-boosting efforts are encouraging and Host Hotels’ Sep-end quarter performance is expected to display improvement in productivity at many of its hotels. In addition, the company has a healthy balance sheet with ample liquidity that augurs well for its growth endeavors.
In September, Host Hotels announced the sale of the New York Marriott Marquis retail, theater, and signage commercial condominium units to Vornado Realty Trust (VNO - Free Report) , for $442 million. The company also announced selling of the W New York – Union Square, for $171 million, which was closed earlier the same month. These dispositions came as part of its efforts to lower exposure to profitability-challenged assets in the New York market which is plagued with a choppy environment amid supply increases and persistent expense inflation.
Nonetheless, though supply growth has been tepid in the past, it has gathered momentum in recent times. In fact, supply growth is expected to remain elevated in 2018 as well as in 2019, particularly in markets where the company has exposure. This is expected to impact the company’s pricing power. Also, dilutive impact of asset sales cannot be bypassed. Hike in interest rate adds to its woes.
Amid these, the Zacks Consensus Estimate for third-quarter revenues is pegged at $1.28 billion, indicating an expected year-over-year increase of 2.1%.
However, the company usually reaps 20-21% of its total adjusted EBITDA in the quarter under review and the Zacks Consensus Estimate for Room Revenues is pinned at $871 million, down from $973 million reported in the prior quarter. The Food and Beverage revenues estimate is pegged at $322 million which is below the $449 million generated in the last quarter.
Additionally, there was lack of any solid catalyst and therefore, in a month’s time, the Zacks Consensus Estimate of FFO per share for the quarter remained unrevised at 35 cents. Nevertheless, the figure denotes an estimated year-over-year rise of 6.1%.
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.
Earnings ESP: The company has an Earnings ESP of 0.00%.
Zacks Rank: Host Hotels has a Zacks Rank #4 (Sell), at present.
Stocks That Warrant a Look
Here are a few other stocks in the REIT sector that you may want to consider, as our model shows that these have the right combination of elements to report a positive surprise this quarter:
Welltower Inc. (WELL - Free Report) , scheduled to release earnings on Oct 30, has an Earnings ESP of +2.04% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Extra Space Storage Inc. (EXR - Free Report) , slated to release third-quarter results on Oct 30, has an Earnings ESP of +0.14% and a Zacks Rank of 3.
Public Storage (PSA - Free Report) , set to report its quarterly numbers on Oct 30, has an Earnings ESP of +1.91% and a Zacks Rank #3.
Note: Anything related to earnings presented in this write-up represents funds from operations (FFO) — a widely used metric to gauge the performance of REITs.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Click here for the 6 trades >>