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Hilton (HLT) to Report Q3 Earnings: What's in the Offing?

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Hilton Worldwide Holdings Inc. (HLT - Free Report) is scheduled to report third-quarter 2023 results on Oct 25, before the opening bell. In the last reported quarter, HLT delivered an earnings surprise of 3.8%.

Q3 Estimates

The Zacks Consensus Estimate for earnings is pegged at $1.66 per share, indicating an improvement of 26.7% from $1.31 reported in the year-ago quarter.

The consensus estimate for revenues is pegged at $2.59 billion, suggesting growth of 9.3% from the prior-year quarter’s figure.

Factors to Note

Hilton’s third-quarter results are likely to have benefited from an improvement in RevPAR, ADR, expansion efforts and robust loyalty program. It is likely to have witnessed solid RevPAR gains in Europe, the Middle East and Africa region owing to strong leisure demand.

For third-quarter 2023, management anticipates system-wide RevPAR to increase in the 4-6% band on a year-over-year basis. We expect system-wide ADR and RevPAR to rise 4.7% and 4.5% year over year to za, respectively. Further, our model predicts system-wide occupancy to be 73%.

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 project franchise and licensing fees, base and other management fees, incentive management fees, and management and franchise fee revenues to jump 8.5%, 12.2%, 31.5% and 10.6% to $621.9 million, $85.2 million, $68.4 million and $775.6 million, respectively. Moreover, we suggest owned and leased hotels revenues to climb 21.7% year over year to $359 million.

For third-quarter 2023, the company envisions net income in the range of $395-$409 million. Adjusted EBITDA is expected to be between $790 million and $810 million. It projects third-quarter EPS (adjusted for special items) to be between $1.60 and $1.65.

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 +5.35%. 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 #2.

Other Stocks Poised to Beat 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.

MGM Resorts International (MGM - Free Report) has an Earnings ESP of +3.03% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Shares of MGM Resorts have improved 3.8% in the past year. MGM’s earnings surpassed the consensus mark in three of the four quarters and missed once, the average surprise being 105.7%.

Marriott International, Inc. (MAR - Free Report) has an Earnings ESP of +4.23% and a Zacks Rank #3.

Shares of Marriott have jumped 21.3% in the past year. MAR’s earnings outpaced the consensus mark in each of the trailing four quarters, the average surprise being 5.5%.

Mattel, Inc. (MAT - Free Report) has an Earnings ESP of +1.15% and a Zacks Rank #3.

Shares of Mattel have increased 4% in the past year. MAT’s earnings outshined the consensus mark thrice in the trailing four quarters and missed once, the average surprise being 84.2%.

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

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