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Hilton (HLT) Gears Up for Q2 Earnings: What's in Store?

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Hilton Worldwide Holdings Inc. (HLT - Free Report) is scheduled to report second-quarter 2023 results on Jul 26, before the opening bell. In the last reported quarter, HLT delivered an earnings surprise of 8.8%.

Q2 Estimates

The Zacks Consensus Estimate for earnings is pegged at $1.56 per share, indicating an improvement of 20.9% from $1.29 reported in the year-ago quarter.

The consensus estimate for revenues is pegged at $2.54 billion, suggesting growth of 13.4% from the prior-year quarter’s figure.

Factors to Note

Hilton’s second-quarter results are likely to gain from a rise in demand, robust loyalty program and expansion efforts. Rising transient business trends might have favored the company’s performance.

Improvement in RevPAR and ADR is likely to boost HLT’s results. It is likely to have witnessed solid RevPAR gains in Europe, the Middle East and Africa region owing to strong leisure demand and recovery in international inbound travel.

For second-quarter 2023, management anticipates system-wide RevPAR to increase between 10% and 12% on a year-over-year basis. We expect system-wide ADR and RevPAR to increase 0.1% and 10.3% year over year to $155 and $120.9, respectively. Further, our model predicts system-wide occupancy to be 78%.

Strong contributions across the company’s franchise and licensing fees, base and other management fees, incentive management fees and management and franchise fee revenues are likely to have aided Hilton’s top line.

We expect franchise and licensing fees, base and other management fees, incentive management fees, and management and franchise fee revenues to increase 12%, 24.9%, 65.4% and 17.1% to $610.3 million, $93.7 million, $76.1 million and $780.1 million, respectively. However, we expect owned and leased hotels revenues to decline 0.3% year over year to $281.1 million.

Management expects adjusted EBITDA to be between $770 million and $790 million. Our model estimates adjusted EBITDA to be $784 million.

What Our Model Says

Our proven model predicts an earnings beat for Hilton this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat.

Earnings ESP: Hilton has an Earnings ESP of +0.36%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Hilton has a Zacks Rank #3.

Stocks Poised to Beat on Earnings

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

Norwegian Cruise Line Holdings Ltd. (NCLH - Free Report) has an Earnings ESP of +10.43% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Shares of Norwegian Cruise have surged 64.8% in the past year. NCLH’s earnings beat estimates in two of the trailing four quarters and missed twice, the average negative surprise being 4%.

MGM Resorts International (MGM - Free Report) has an Earnings ESP of +19.43% and a Zacks Rank #2.

Shares of MGM Resorts have increased 8% in the past year. MGM’s earnings beat estimates in two of the trailing four quarters and missed twice, the average surprise being 81%.

Electronic Arts Inc. (EA - Free Report) has an Earnings ESP of +2.54% and a Zacks Rank #2.

Shares of Electronic Arts have increased 5.9% in the past three months. EA’s earnings beat estimates in two of the trailing four quarters and missed twice, the average surprise being 7.3%.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

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