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What's in the Offing for Host Hotels (HST) in Q1 Earnings?
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Host Hotels & Resorts, Inc. (HST - Free Report) is scheduled to release first-quarter 2023 earnings on May 3, after market close. HST’s quarterly results are likely to exhibit year-over-year growth in revenues and funds from operations (FFO) per share.
In the previous quarter, the Bethesda, MD-based lodging real estate investment trust (REIT) delivered a surprise of 2.33% in terms of adjusted FFO per share. The quarterly results reflected better-than-anticipated revenues, aided by continued strong leisure demand and growth in the urban markets.
Over the trailing four quarters, Host Hotels’ adjusted FFO per share surpassed estimates on three occasions and missed once, the average beat being 17.04%. The graph below depicts this surprise history:
Host Hotels & Resorts, Inc. Price and EPS Surprise
Host Hotels’ first-quarter earnings are likely to have benefited from the continued recovery in leisure travel demand, particularly in the Sunbelt markets and Hawaii region, where the company has a strong presence.
Also, corporate demand from small and medium-sized businesses, representing a large share, is likely to have been healthy during the quarter. This is expected to have aided business transient demand, boosting the company’s top line.
Further, backed by this rebound in demand for HST’s properties, we expect occupancy rate and revenue per available room (RevPAR) to have improved during the to-be-reported quarter.
The Zacks Consensus Estimate for quarterly RevPAR stands at $209.66, indicating a jump of 25.6% from the year-ago quarter’s reported figure of $166.93. Our estimate is pegged at $200.62. The consensus mark for the average occupancy rate is pegged at 67%, suggesting an improvement of 23.3% from the prior-year quarter’s reported figure. We expect the same to be 66.4%.
The Zacks Consensus Estimate for HST’s first-quarter revenues is presently pegged at $1.32 billion, implying growth of 22.9% from the prior-year period’s reported figure of $1.07 billion.
HST’s capital-recycling efforts are anticipated to have aided the company’s acquisition and development activities during the quarter. Further, these efforts are likely to have relieved the pressure on its balance sheet.
In January, HST amended and restated its existing $2.5 billion credit facility to boost liquidity position and financial flexibility. This extended the facility’s maturity from January 2025 to January 2028, inclusive of all extension options, and did not result in any increase in the pricing of the facilities.
However, increasing interest expenses might have cast a pall on the company’s performance during the quarter. We expect first-quarter 2023 interest expenses to have risen 32.5% year over year.
The Zacks Consensus Estimate for the FFO per share has been unchanged at 48 cents over the past month. The figure, however, implies a year-over-year jump of 23.1%.
Earning Whispers
Our proven model does not conclusively predict a surprise in terms of FFO per share for HST this season. The combination of a positive Earnings ESP and a Zacks Rank #3 (Hold) or higher — increases the odds of a beat. However, that’s not the case here.
Earnings ESP: Host Hotels has an Earnings ESP of -4.17%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Here are some stocks that are worth considering from the REIT sector, as our model shows that these have the right combination of elements to deliver a surprise this reporting cycle:
Realty Income (O - Free Report) is scheduled to report quarterly figures on May 3. O currently has an Earnings ESP of +0.12 % and a Zacks Rank # 3.
Federal Realty Investment Trust (FRT - Free Report) is scheduled to report quarterly figures on May 4. FRT has an Earnings ESP of +0.57% and a Zacks Rank of 3 currently.
Americold Realty Trust (COLD - Free Report) is scheduled to report quarterly figures on May 4. COLD currently has an Earnings ESP of +17.72% and a Zacks Rank #2 (Buy).
Image: Bigstock
What's in the Offing for Host Hotels (HST) in Q1 Earnings?
Host Hotels & Resorts, Inc. (HST - Free Report) is scheduled to release first-quarter 2023 earnings on May 3, after market close. HST’s quarterly results are likely to exhibit year-over-year growth in revenues and funds from operations (FFO) per share.
In the previous quarter, the Bethesda, MD-based lodging real estate investment trust (REIT) delivered a surprise of 2.33% in terms of adjusted FFO per share. The quarterly results reflected better-than-anticipated revenues, aided by continued strong leisure demand and growth in the urban markets.
Over the trailing four quarters, Host Hotels’ adjusted FFO per share surpassed estimates on three occasions and missed once, the average beat being 17.04%. The graph below depicts this surprise history:
Host Hotels & Resorts, Inc. Price and EPS Surprise
Host Hotels & Resorts, Inc. price-eps-surprise | Host Hotels & Resorts, Inc. Quote
Factors at Play
Host Hotels’ first-quarter earnings are likely to have benefited from the continued recovery in leisure travel demand, particularly in the Sunbelt markets and Hawaii region, where the company has a strong presence.
Also, corporate demand from small and medium-sized businesses, representing a large share, is likely to have been healthy during the quarter. This is expected to have aided business transient demand, boosting the company’s top line.
Further, backed by this rebound in demand for HST’s properties, we expect occupancy rate and revenue per available room (RevPAR) to have improved during the to-be-reported quarter.
The Zacks Consensus Estimate for quarterly RevPAR stands at $209.66, indicating a jump of 25.6% from the year-ago quarter’s reported figure of $166.93. Our estimate is pegged at $200.62. The consensus mark for the average occupancy rate is pegged at 67%, suggesting an improvement of 23.3% from the prior-year quarter’s reported figure. We expect the same to be 66.4%.
The Zacks Consensus Estimate for HST’s first-quarter revenues is presently pegged at $1.32 billion, implying growth of 22.9% from the prior-year period’s reported figure of $1.07 billion.
HST’s capital-recycling efforts are anticipated to have aided the company’s acquisition and development activities during the quarter. Further, these efforts are likely to have relieved the pressure on its balance sheet.
In January, HST amended and restated its existing $2.5 billion credit facility to boost liquidity position and financial flexibility. This extended the facility’s maturity from January 2025 to January 2028, inclusive of all extension options, and did not result in any increase in the pricing of the facilities.
However, increasing interest expenses might have cast a pall on the company’s performance during the quarter. We expect first-quarter 2023 interest expenses to have risen 32.5% year over year.
The Zacks Consensus Estimate for the FFO per share has been unchanged at 48 cents over the past month. The figure, however, implies a year-over-year jump of 23.1%.
Earning Whispers
Our proven model does not conclusively predict a surprise in terms of FFO per share for HST this season. The combination of a positive Earnings ESP and a Zacks Rank #3 (Hold) or higher — increases the odds of a beat. However, that’s not the case here.
Earnings ESP: Host Hotels has an Earnings ESP of -4.17%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Host Hotels currently carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Stocks That Warrant a Look
Here are some stocks that are worth considering from the REIT sector, as our model shows that these have the right combination of elements to deliver a surprise this reporting cycle:
Realty Income (O - Free Report) is scheduled to report quarterly figures on May 3. O currently has an Earnings ESP of +0.12 % and a Zacks Rank # 3.
Federal Realty Investment Trust (FRT - Free Report) is scheduled to report quarterly figures on May 4. FRT has an Earnings ESP of +0.57% and a Zacks Rank of 3 currently.
Americold Realty Trust (COLD - Free Report) is scheduled to report quarterly figures on May 4. COLD currently has an Earnings ESP of +17.72% and a Zacks Rank #2 (Buy).
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
Note: Anything related to earnings presented in this write-up represents FFO — a widely used metric to gauge the performance of REITs.