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Why Is Host Hotels (HST) Down 6.1% Since the Last Earnings Report?
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It has been about a month since the last earnings report for Host Hotels & Resorts, Inc. (HST - Free Report) . Shares have lost about 6.1% in that time frame, underperforming the market.
Will the recent negative trend continue leading up to the stock's next earnings release, or is it due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Host Hotels & Resorts reported first-quarter 2017 adjusted FFO of $0.44 per share, beating the Zacks Consensus Estimate of $0.39. Adjusted FFO per share was up 7.3% from the year-ago tally of $0.41. Results reflect growth in comparable hotel revenues and improvement in margin.
The company posted total revenue of nearly $1.35 billion, which beat the Zacks Consensus Estimate of $1.32 billion. The figure compared favorably with the year-ago number of $1.34 billion. Results were driven by an increase in RevPAR at the company’s comparable hotels and growth in food & beverage revenues due to a favorable shift in the Easter holiday.
Quarter in Details
During the reported quarter, comparable hotel revenues grew 3.1% year over year to $1.2 billion, backed by a group performance.
Comparable RevPAR (on a constant dollar basis) was up 3.4% year over year, driven by a 2.4% increase in average room rate and an 80 basis point expansion in occupancy to 75.8%.
At its domestic properties, comparable RevPAR increased 3.8% and the Washington D.C. market outperformed the portfolio as a result of the Presidential inauguration and Women’s March. On the other hand, San Francisco and New York properties lagged the portfolio. However, RevPAR at the company’s comparable international properties were down 7.1% on a constant-dollar basis. Results reflect substantial decline at three of the company’s properties in Rio de Janeiro due to Brazilian economy weakness.
Nevertheless, improvements in RevPAR and food and beverage revenues aided the GAAP operating profit margin growth of 140 basis points for the quarter.
During the quarter under review, the company invested around $16 million for redevelopment and ROI capital expenditures. It also spent approximately $64 million on renewal and replacement.
Finally, the company exited first-quarter 2017 with around $411 million of unrestricted cash and $784 million of available capacity, remaining under the revolver part of its credit facility. As of Mar 31, 2017, total debt was $4.0 billion, having an average maturity of 5.1 years and an average interest rate of 3.8%. Notably, the company has not repurchased any shares in 2017.
Outlook
For full-year 2017, Host Hotels expects its adjusted FFO per share in the range of $1.60–$1.68, backed by comparable hotel RevPAR (constant U.S. dollar basis) growth of 0.0–2.0%.
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed a downward trend in fresh estimates. There have been seven revisions lower for the current quarter. In the past month, the consensus estimate has shifted downward by 6.5% due to these changes.
At this time, Host Hotels' stock has an average score of 'C', on both growth and momentum front. Charting a somewhat similar path, the stock was allocated a grade of 'B' on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'B'. If you aren't focused on one strategy, this score is the one you should be interested in.
Based on our scores, the stock is more suitable for value investors than those looking for growth and momentum.
Outlook
Estimates have been broadly trending downward for the stock. The magnitude of this revision also indicates a downward shift. Notably, the stock has a Zacks Rank #3 (Hold). We are expecting an inline return from the stock in the next few months.
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Why Is Host Hotels (HST) Down 6.1% Since the Last Earnings Report?
It has been about a month since the last earnings report for Host Hotels & Resorts, Inc. (HST - Free Report) . Shares have lost about 6.1% in that time frame, underperforming the market.
Will the recent negative trend continue leading up to the stock's next earnings release, or is it due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Host Hotels Q1 FFO Beats Estimates, Margin Improves
Host Hotels & Resorts reported first-quarter 2017 adjusted FFO of $0.44 per share, beating the Zacks Consensus Estimate of $0.39. Adjusted FFO per share was up 7.3% from the year-ago tally of $0.41. Results reflect growth in comparable hotel revenues and improvement in margin.
The company posted total revenue of nearly $1.35 billion, which beat the Zacks Consensus Estimate of $1.32 billion. The figure compared favorably with the year-ago number of $1.34 billion. Results were driven by an increase in RevPAR at the company’s comparable hotels and growth in food & beverage revenues due to a favorable shift in the Easter holiday.
Quarter in Details
During the reported quarter, comparable hotel revenues grew 3.1% year over year to $1.2 billion, backed by a group performance.
Comparable RevPAR (on a constant dollar basis) was up 3.4% year over year, driven by a 2.4% increase in average room rate and an 80 basis point expansion in occupancy to 75.8%.
At its domestic properties, comparable RevPAR increased 3.8% and the Washington D.C. market outperformed the portfolio as a result of the Presidential inauguration and Women’s March. On the other hand, San Francisco and New York properties lagged the portfolio. However, RevPAR at the company’s comparable international properties were down 7.1% on a constant-dollar basis. Results reflect substantial decline at three of the company’s properties in Rio de Janeiro due to Brazilian economy weakness.
Nevertheless, improvements in RevPAR and food and beverage revenues aided the GAAP operating profit margin growth of 140 basis points for the quarter.
During the quarter under review, the company invested around $16 million for redevelopment and ROI capital expenditures. It also spent approximately $64 million on renewal and replacement.
Finally, the company exited first-quarter 2017 with around $411 million of unrestricted cash and $784 million of available capacity, remaining under the revolver part of its credit facility. As of Mar 31, 2017, total debt was $4.0 billion, having an average maturity of 5.1 years and an average interest rate of 3.8%. Notably, the company has not repurchased any shares in 2017.
Outlook
For full-year 2017, Host Hotels expects its adjusted FFO per share in the range of $1.60–$1.68, backed by comparable hotel RevPAR (constant U.S. dollar basis) growth of 0.0–2.0%.
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed a downward trend in fresh estimates. There have been seven revisions lower for the current quarter. In the past month, the consensus estimate has shifted downward by 6.5% due to these changes.
Host Hotels & Resorts, Inc. Price and Consensus
Host Hotels & Resorts, Inc. Price and Consensus | Host Hotels & Resorts, Inc. Quote
VGM Scores
At this time, Host Hotels' stock has an average score of 'C', on both growth and momentum front. Charting a somewhat similar path, the stock was allocated a grade of 'B' on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'B'. If you aren't focused on one strategy, this score is the one you should be interested in.
Based on our scores, the stock is more suitable for value investors than those looking for growth and momentum.
Outlook
Estimates have been broadly trending downward for the stock. The magnitude of this revision also indicates a downward shift. Notably, the stock has a Zacks Rank #3 (Hold). We are expecting an inline return from the stock in the next few months.