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Factors Setting the Tone for Hyatt (H) This Earnings Season

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Hyatt Hotels Corporation (H - Free Report) is scheduled to report fourth-quarter 2020 results on Feb 17, after the closing bell. In the last reported quarter, the company reported an earnings miss of 18.4%.

How Are Estimates Faring?

The Zacks Consensus Estimate for fourth-quarter bottom line is pegged at a loss of $1.36, which suggests deterioration from earnings of 47 cents in the prior-year quarter.

For revenues, the consensus mark is at $453.6 million, suggesting a decline of 64.4% from the year-ago quarter’s levels.

Let’s analyze the factors that are likely to make an impact this earnings season.

Hyatt Hotels Corporation Price and EPS Surprise

 

Hyatt Hotels Corporation Price and EPS Surprise

Hyatt Hotels Corporation price-eps-surprise | Hyatt Hotels Corporation Quote

 

Factors at Play

Hyatt’s fourth-quarter 2020 results are likely to have been negatively impacted by the coronavirus pandemic. Although occupancy rates are improving in greater parts of China, rise in COVID-19 cases (across the United States and Europe) along with quarantines and travel restrictions are likely to have affected fourth quarter top-line. This along with high operating costs stemming from the pandemic is likely to have had hurt margins in the fourth quarter.

Notably, the Zacks Consensus Estimate for Management and franchise fees is pegged at $49.8 million, which indicates a decline of 69% from $161 million reported in the previous quarter. The consensus mark for Owned and leased hotels revenues is currently pegged at $99 million, indicating a decline of 78.4% from $458 million in the year-ago quarter.

Nonetheless, increased focus on unit growth (including newbuilds and conversions), cost-saving measures, financial flexibility, loyalty programs and operational efficiencies are likely to have driven the company’s performance in the to-be-reported quarter.

What Our Model Says

Our proven model does not conclusively predict an earnings beat for Hyatt this time around. A stock needs to have a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) to beat earnings. But that's not the case here.

Earnings ESP: Hyatt has an Earnings ESP of +4.93%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: The company has a Zacks Rank #5 (Strong Sell).

You can see the complete list of today’s Zacks #1 Rank stocks here.

Stock With Favorable Combinations

Here are some stocks from the Zacks Consumer Discretionary space that investors may consider as our model shows that these have the right combination of elements to post an earnings beat this quarter:

AMC Entertainment Holdings, Inc. (AMC - Free Report) has a Zacks Rank #2 and an Earnings ESP of +14.69%.

Camping World Holdings, Inc. (CWH - Free Report) has a Zacks Rank #2 and an Earnings ESP of +45.46%.

iHeartMedia, Inc. (IHRT - Free Report) has a Zacks Rank #3 and an Earnings ESP of +14.29%.

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