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Hilton (HLT) to Report Q4 Earnings: What's in the Offing?
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Hilton Worldwide Holdings Inc. (HLT - Free Report) is scheduled to report fourth-quarter 2020 results on Feb 17, before the opening bell. In the last reported quarter, the company’s earnings surpassed the Zacks Consensus Estimate by 166.7%.
Q4 Estimates
The Zacks Consensus Estimate for fourth-quarter bottom line is pegged at 4 cents, suggesting a deterioration of 96% from $1.00 reported in the prior-year quarter. The company’s earnings estimates have declined 5.2% in the past 30 days, reflecting analysts’ concern regarding the stock.
For revenues, the consensus mark is at $1,057 million, suggesting a decline of 55.4% from the year-ago quarter’s levels.
Let’s analyze the factors that are likely to make an impact this earnings season.
Hilton Worldwide Holdings Inc. Price and EPS Surprise
The coronavirus pandemic is likely to have negatively impacted Hilton’s fourth-quarter performance. Notably, strict government restrictions in Europe are likely to have had a negative impact on fourth-quarter top line. Also, high operating and fixed costs stemming from the pandemic are likely to have hurt margins in the to-be-reported quarter. Although sequential improvements in occupancy rates are likely during the fourth quarter (owing to hotel reopening’s and easing of travel restrictions), RevPAR is expected to match third-quarter 2020 levels.
Moreover, dismal performance across the company’s Franchise and licensing fees, Incentive management fees as well as Base and other management fees is likely to get reflected in the fourth-quarter top line.
The consensus estimate for Franchise and licensing fees is pegged at $234 million, indicating a decline of 43.2% from $412 million reported in the previous quarter. Incentive management fees are currently projected at $9.1 million, indicating a decline of 85.6% from $63 million in the year-ago quarter. Base and other management fees are estimated at $28.5 million, indicating a decline of 65.7% from $83 million in the year-ago quarter.
However, increased focus on digital traffic, along with unit expansion strategies, hotel conversions, new project developments, loyalty program and asset-light business model is likely to have aided the company’s performance in the to-be-reported quarter. For 2020, the company expects net unit growth in the range of 4.5-5%.
What Our Model Says
Our proven model does not conclusively predict an earnings beat for Hilton 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: Hilton has an Earnings ESP of +17.39%. 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 #4 (Sell).
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%.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by referendums and legislation, this industry is expected to blast from an already robust $17.7 billion in 2019 to a staggering $73.6 billion by 2027. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
Image: Bigstock
Hilton (HLT) to Report Q4 Earnings: What's in the Offing?
Hilton Worldwide Holdings Inc. (HLT - Free Report) is scheduled to report fourth-quarter 2020 results on Feb 17, before the opening bell. In the last reported quarter, the company’s earnings surpassed the Zacks Consensus Estimate by 166.7%.
Q4 Estimates
The Zacks Consensus Estimate for fourth-quarter bottom line is pegged at 4 cents, suggesting a deterioration of 96% from $1.00 reported in the prior-year quarter. The company’s earnings estimates have declined 5.2% in the past 30 days, reflecting analysts’ concern regarding the stock.
For revenues, the consensus mark is at $1,057 million, suggesting a decline of 55.4% from the year-ago quarter’s levels.
Let’s analyze the factors that are likely to make an impact this earnings season.
Hilton Worldwide Holdings Inc. Price and EPS Surprise
Hilton Worldwide Holdings Inc. price-eps-surprise | Hilton Worldwide Holdings Inc. Quote
Factors at Play
The coronavirus pandemic is likely to have negatively impacted Hilton’s fourth-quarter performance. Notably, strict government restrictions in Europe are likely to have had a negative impact on fourth-quarter top line. Also, high operating and fixed costs stemming from the pandemic are likely to have hurt margins in the to-be-reported quarter. Although sequential improvements in occupancy rates are likely during the fourth quarter (owing to hotel reopening’s and easing of travel restrictions), RevPAR is expected to match third-quarter 2020 levels.
Moreover, dismal performance across the company’s Franchise and licensing fees, Incentive management fees as well as Base and other management fees is likely to get reflected in the fourth-quarter top line.
The consensus estimate for Franchise and licensing fees is pegged at $234 million, indicating a decline of 43.2% from $412 million reported in the previous quarter. Incentive management fees are currently projected at $9.1 million, indicating a decline of 85.6% from $63 million in the year-ago quarter. Base and other management fees are estimated at $28.5 million, indicating a decline of 65.7% from $83 million in the year-ago quarter.
However, increased focus on digital traffic, along with unit expansion strategies, hotel conversions, new project developments, loyalty program and asset-light business model is likely to have aided the company’s performance in the to-be-reported quarter. For 2020, the company expects net unit growth in the range of 4.5-5%.
What Our Model Says
Our proven model does not conclusively predict an earnings beat for Hilton 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: Hilton has an Earnings ESP of +17.39%. 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 #4 (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%.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by referendums and legislation, this industry is expected to blast from an already robust $17.7 billion in 2019 to a staggering $73.6 billion by 2027. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot stocks we're targeting >>