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Hilton Worldwide Holdings Inc. (HLT) Up 10.1% Since Last Earnings Report: Can It Continue?
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A month has gone by since the last earnings report for Hilton Worldwide Holdings Inc. (HLT - Free Report) . Shares have added about 10.1% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Hilton Worldwide Holdings Inc. due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Hilton Q4 Earnings & Revenues Miss Estimates, Fall Y/Y
Hilton reported dismal fourth-quarter 2020 results, with earnings and revenues missing the Zacks Consensus Estimate as well as declining on a year-over-year basis. Notably, the company’s operations were negatively impacted by strict travel restrictions stemming from rise in COVID-19 cases.
Q4 in Detail
In the quarter under review, Hilton’s adjusted loss per share was 10 cents, wider than the Zacks Consensus Estimate of earnings of 4 cents. In the prior-year quarter, the company reported adjusted earnings per share (EPS) of $1.00.
Quarterly revenues of $890 million missed the consensus mark of $1,057 million. Moreover, the top line declined 62.4% from the year-ago quarter’s levels. Both the top and the bottom line were negatively impacted by the coronavirus pandemic.
RevPAR and Adjusted EBITDA
In the quarter under review, system-wide comparable revenue per available room (RevPAR) slumped 59.2% on a currency-neutral basis due to decline in occupancy and average daily rate (ADR). The downtrend was caused by re-imposed travel restrictions and re-suspensions of hotel operations (particularly in Europe), owing to rise in COVID-19 cases.
During the quarter under review, management fee and franchise and licensing fee revenues were down 50% on a year-over-year basis. The downside was due to complete (or partial) hotel operation suspensions owing to the global pandemic. Markedly, this affected nearly 20% of its global hotel properties.
Meanwhile, adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) during the fourth quarter came in at $204 million compared with $586 million in the prior-year quarter.
Cash, Debt and Share Repurchase
As of Dec 31, 2020, cash and cash equivalent balance (inclusive of restricted cash) amounted to $3,263 million. The company had $10.6 billion of long-term debt outstanding, excluding deferred financing costs and discount, with a weighted average interest rate of 3.77%.
Following the suspension of share repurchase program and dividend payouts in March, no transactions were made during the fourth quarter (ended Dec 31, 2020). Notably, the company has $2.2 billion under its stock repurchase program.
2020 Highlights
Total revenues in 2020 came in at $4,307 million compared with $9,452 million in 2019.
Adjusted EBITDA in 2020 came in at $842 million compared with $2,308 million in 2019.
In 2020, adjusted diluted EPS came in at 10 cents compared with $3.90 in the previous year.
Business Updates
Notably, Hilton opened 154 new hotels in fourth-quarter 2020. It also achieved net unit growth of nearly 20,900 rooms. During the quarter, the company marked the 300th hotel opening in China with the launch of Waldorf Astoria Xiamen. It also boosted its luxury portfolio with the opening of the Waldorf Astoria Monarch Beach Resort & Club.
As of Dec 31, 2020, Hilton's development pipeline comprised more than 2,570 hotels, with nearly 397,000 rooms across 116 countries and territories — including 31 countries and territories where it currently does not have any running hotels. Moreover, 233,000 rooms in the development pipeline were located outside the United States and 204,000 rooms were under construction.
As of Feb 10, 2021, 97% of Hilton's global hotel properties were open, while nearly 220 hotels had temporarily suspended operations.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision. The consensus estimate has shifted -43.59% due to these changes.
VGM Scores
Currently, Hilton Worldwide Holdings Inc. has a poor Growth Score of F, a grade with the same score on the momentum front. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Hilton Worldwide Holdings Inc. has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.
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Hilton Worldwide Holdings Inc. (HLT) Up 10.1% Since Last Earnings Report: Can It Continue?
A month has gone by since the last earnings report for Hilton Worldwide Holdings Inc. (HLT - Free Report) . Shares have added about 10.1% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Hilton Worldwide Holdings Inc. due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Hilton Q4 Earnings & Revenues Miss Estimates, Fall Y/Y
Hilton reported dismal fourth-quarter 2020 results, with earnings and revenues missing the Zacks Consensus Estimate as well as declining on a year-over-year basis. Notably, the company’s operations were negatively impacted by strict travel restrictions stemming from rise in COVID-19 cases.
Q4 in Detail
In the quarter under review, Hilton’s adjusted loss per share was 10 cents, wider than the Zacks Consensus Estimate of earnings of 4 cents. In the prior-year quarter, the company reported adjusted earnings per share (EPS) of $1.00.
Quarterly revenues of $890 million missed the consensus mark of $1,057 million. Moreover, the top line declined 62.4% from the year-ago quarter’s levels. Both the top and the bottom line were negatively impacted by the coronavirus pandemic.
RevPAR and Adjusted EBITDA
In the quarter under review, system-wide comparable revenue per available room (RevPAR) slumped 59.2% on a currency-neutral basis due to decline in occupancy and average daily rate (ADR). The downtrend was caused by re-imposed travel restrictions and re-suspensions of hotel operations (particularly in Europe), owing to rise in COVID-19 cases.
During the quarter under review, management fee and franchise and licensing fee revenues were down 50% on a year-over-year basis. The downside was due to complete (or partial) hotel operation suspensions owing to the global pandemic. Markedly, this affected nearly 20% of its global hotel properties.
Meanwhile, adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) during the fourth quarter came in at $204 million compared with $586 million in the prior-year quarter.
Cash, Debt and Share Repurchase
As of Dec 31, 2020, cash and cash equivalent balance (inclusive of restricted cash) amounted to $3,263 million. The company had $10.6 billion of long-term debt outstanding, excluding deferred financing costs and discount, with a weighted average interest rate of 3.77%.
Following the suspension of share repurchase program and dividend payouts in March, no transactions were made during the fourth quarter (ended Dec 31, 2020). Notably, the company has $2.2 billion under its stock repurchase program.
2020 Highlights
Total revenues in 2020 came in at $4,307 million compared with $9,452 million in 2019.
Adjusted EBITDA in 2020 came in at $842 million compared with $2,308 million in 2019.
In 2020, adjusted diluted EPS came in at 10 cents compared with $3.90 in the previous year.
Business Updates
Notably, Hilton opened 154 new hotels in fourth-quarter 2020. It also achieved net unit growth of nearly 20,900 rooms. During the quarter, the company marked the 300th hotel opening in China with the launch of Waldorf Astoria Xiamen. It also boosted its luxury portfolio with the opening of the Waldorf Astoria Monarch Beach Resort & Club.
As of Dec 31, 2020, Hilton's development pipeline comprised more than 2,570 hotels, with nearly 397,000 rooms across 116 countries and territories — including 31 countries and territories where it currently does not have any running hotels. Moreover, 233,000 rooms in the development pipeline were located outside the United States and 204,000 rooms were under construction.
As of Feb 10, 2021, 97% of Hilton's global hotel properties were open, while nearly 220 hotels had temporarily suspended operations.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision. The consensus estimate has shifted -43.59% due to these changes.
VGM Scores
Currently, Hilton Worldwide Holdings Inc. has a poor Growth Score of F, a grade with the same score on the momentum front. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Hilton Worldwide Holdings Inc. has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.