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Hilton (HLT) to Report Q2 Earnings: What's in the Offing?

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Hilton Worldwide Holdings Inc. (HLT - Free Report) is scheduled to report second-quarter 2021 results on Jul 29, before the opening bell. In the last-reported quarter, the company reported a negative earnings surprise of 60%.

Q2 Estimates

The Zacks Consensus Estimate for second-quarter bottom line is pegged at 32 cents per share, indicating an improvement of 152.5% from a loss of 61 cents reported in the year-ago quarter.

For revenues, the consensus mark is pegged at $1,288 million, suggesting growth of 128.3% from the prior-year quarter’s figure.

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

Factors at Play

Hilton’s second-quarter 2021 performance is likely to have reflected improvement in group and corporate bookings. However, bookings are likely to have remained below the pre-pandemic level. Uptick in leisure demand, coupled with a rise in forward bookings as well as lengthening booking windows, is likely to have aided the second-quarter top line. This, along with focus on digital traffic, unit expansion strategies, hotel conversions, new project developments, loyalty program and an asset-light business model, is likely to have contributed to the company’s performance in the to-be-reported quarter.

Constrained international travel, owing to tightened travel restrictions, is likely to have negatively impacted the company’s performance in the second quarter. Also, high operating and fixed costs stemming from the pandemic are likely to have hurt margins in the to-be-reported quarter. During the first quarter, the company experienced significant declines in RevPAR in all regions, primarily due to decline in occupancy resulting from the COVID-19 pandemic, the trend is likely to have continued in second-quarter 2021.

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 -11.86%. 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).

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:

Golden Entertainment, Inc. (GDEN - Free Report) sports a Zacks Rank #1 and has an Earnings ESP of +5.22%. You can see the complete list of today’s Zacks #1 Rank stocks here.

Churchill Downs Incorporated (CHDN - Free Report) has a Zacks Rank #2 and an Earnings ESP of +7.42%.

Caesars Entertainment, Inc. (CZR - Free Report) has a Zacks Rank #2 and an Earnings ESP of +265.6%.