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Here's What to Expect Ahead of Hilton's Q3 Earnings Release
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Hilton Worldwide Holdings Inc. (HLT - Free Report) is scheduled to report third-quarter 2024 results on Oct. 23, before the opening bell. In the last reported quarter, the company registered an earnings surprise of 3.2%.
The Zacks Consensus Estimate for the third-quarter bottom line is pegged at $1.85 per share, indicating an improvement of 10.8% from $1.67 reported in the year-ago quarter.
For revenues, the consensus mark is pegged at nearly $2.9 billion, suggesting growth of 7.2% from the prior-year quarter’s figure.
Hilton Worldwide Holdings Inc. Price and EPS Surprise
Let's look at how things have shaped up in the quarter.
Factors at Play
Hilton’s third-quarter revenues are expected to increase year over year courtesy of robust group bookings, corporate demand and the ongoing recovery of business travel. This and the emphasis on development pipeline and strategic partnerships, such as its collaboration with Small Luxury Hotels of the World are likely to have aided the company’s performance in the to-be-reported quarter.
Improvement in system-wide revenue per available room (RevPAR), attributable to increased occupancy rates and average daily rate, is likely to have driven the company’s third-quarter top line. For third-quarter 2024, the company expects RevPAR growth to be between 2% and 3% year over year.
Strong contributions across the company’s Base and other management fees, Incentive management fees and Owned and leased hotels are likely to get reflected in the third-quarter top line. We expect Franchise and licensing fees, Base and other management fees and Incentive Management Fees to increase 10.2% year over year (to $708.3 million), 19.5% year over year (to $96.8 million) and 12.3% year over year (to $70.8 million), respectively.
For third-quarter 2024, Hilton anticipates net income in the range of $435-$448 million. The company anticipates third-quarter adjusted EBITDA between $875 million and $890 million, while diluted EPS, adjusted for special items, is forecasted to range between $1.80 and $1.85.
However, softer trends in certain international markets and normalization of leisure growth have tempered Hilton’s expectations for the remainder of the year. Also, China’s slower recovery and weaker international inbound travel are likely to have weighed on RevPAR in the Asia-Pacific region. Elevated expenses and interest rates pose challenges to the execution of the company’s growth strategy.
Our Take
Considering the factors, investors may view Hilton favorably. The company's focus on its development pipeline and strategic partnerships, alongside RevPAR improvements, is likely to have supported its overall performance. While elevated expenses and interest rates present challenges, Hilton's robust fee growth and disciplined execution provide a strong foundation for continued momentum. Existing investors with a long-term view may prefer to hold on to HLT, while new investors may wait for the earnings results to gain further clarity.
What Our Model Says
Our proven model does not conclusively predict an earnings beat for Hilton this time. A stock needs to have a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) to beat earnings. However, that's not the case here.
Earnings ESP: Hilton has an Earnings ESP of -0.84%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Here are some better 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.
AMC Entertainment Holdings, Inc. (AMC - Free Report) has an Earnings ESP of +84.00% and a Zacks Rank of 2 at present.
AMC is expected to register a 33.3% increase year over year in earnings for the to-be-reported quarter. It reported better-than-expected earnings in two of the trailing four quarters and missed twice, the average negative surprise being 69.5%.
Boyd Gaming Corporation (BYD - Free Report) currently has an Earnings ESP of +17.79% and a Zacks Rank of 2.
BYD’s earnings for the to-be-reported quarter are expected to increase 3.7% year over year. It reported better-than-expected earnings in two of the trailing four quarters and missed twice, the average surprise being 3.6%.
Marriott International, Inc. (MAR - Free Report) currently has an Earnings ESP of +1.57% and a Zacks Rank of 3.
MAR’s earnings for the to-be-reported quarter are expected to increase 9.5% year over year. It reported better-than-expected earnings in three of the trailing four quarters and missed once, the average surprise being 16.9%.
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Here's What to Expect Ahead of Hilton's Q3 Earnings Release
Hilton Worldwide Holdings Inc. (HLT - Free Report) is scheduled to report third-quarter 2024 results on Oct. 23, before the opening bell. In the last reported quarter, the company registered an earnings surprise of 3.2%.
Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.
How Are Estimates Faring?
The Zacks Consensus Estimate for the third-quarter bottom line is pegged at $1.85 per share, indicating an improvement of 10.8% from $1.67 reported in the year-ago quarter.
For revenues, the consensus mark is pegged at nearly $2.9 billion, suggesting growth of 7.2% from the prior-year quarter’s figure.
Hilton Worldwide Holdings Inc. Price and EPS Surprise
Hilton Worldwide Holdings Inc. price-eps-surprise | Hilton Worldwide Holdings Inc. Quote
Let's look at how things have shaped up in the quarter.
Factors at Play
Hilton’s third-quarter revenues are expected to increase year over year courtesy of robust group bookings, corporate demand and the ongoing recovery of business travel. This and the emphasis on development pipeline and strategic partnerships, such as its collaboration with Small Luxury Hotels of the World are likely to have aided the company’s performance in the to-be-reported quarter.
Improvement in system-wide revenue per available room (RevPAR), attributable to increased occupancy rates and average daily rate, is likely to have driven the company’s third-quarter top line. For third-quarter 2024, the company expects RevPAR growth to be between 2% and 3% year over year.
Strong contributions across the company’s Base and other management fees, Incentive management fees and Owned and leased hotels are likely to get reflected in the third-quarter top line. We expect Franchise and licensing fees, Base and other management fees and Incentive Management Fees to increase 10.2% year over year (to $708.3 million), 19.5% year over year (to $96.8 million) and 12.3% year over year (to $70.8 million), respectively.
For third-quarter 2024, Hilton anticipates net income in the range of $435-$448 million. The company anticipates third-quarter adjusted EBITDA between $875 million and $890 million, while diluted EPS, adjusted for special items, is forecasted to range between $1.80 and $1.85.
However, softer trends in certain international markets and normalization of leisure growth have tempered Hilton’s expectations for the remainder of the year. Also, China’s slower recovery and weaker international inbound travel are likely to have weighed on RevPAR in the Asia-Pacific region. Elevated expenses and interest rates pose challenges to the execution of the company’s growth strategy.
Our Take
Considering the factors, investors may view Hilton favorably. The company's focus on its development pipeline and strategic partnerships, alongside RevPAR improvements, is likely to have supported its overall performance. While elevated expenses and interest rates present challenges, Hilton's robust fee growth and disciplined execution provide a strong foundation for continued momentum. Existing investors with a long-term view may prefer to hold on to HLT, while new investors may wait for the earnings results to gain further clarity.
What Our Model Says
Our proven model does not conclusively predict an earnings beat for Hilton this time. A stock needs to have a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) to beat earnings. However, that's not the case here.
Earnings ESP: Hilton has an Earnings ESP of -0.84%. 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 #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Stocks Poised to Beat Earnings Estimates
Here are some better 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.
AMC Entertainment Holdings, Inc. (AMC - Free Report) has an Earnings ESP of +84.00% and a Zacks Rank of 2 at present.
AMC is expected to register a 33.3% increase year over year in earnings for the to-be-reported quarter. It reported better-than-expected earnings in two of the trailing four quarters and missed twice, the average negative surprise being 69.5%.
Boyd Gaming Corporation (BYD - Free Report) currently has an Earnings ESP of +17.79% and a Zacks Rank of 2.
BYD’s earnings for the to-be-reported quarter are expected to increase 3.7% year over year. It reported better-than-expected earnings in two of the trailing four quarters and missed twice, the average surprise being 3.6%.
Marriott International, Inc. (MAR - Free Report) currently has an Earnings ESP of +1.57% and a Zacks Rank of 3.
MAR’s earnings for the to-be-reported quarter are expected to increase 9.5% year over year. It reported better-than-expected earnings in three of the trailing four quarters and missed once, the average surprise being 16.9%.