It has been about a month since the last earnings report for Host Hotels (HST Quick QuoteHST - Free Report) . Shares have lost about 1.8% in that time frame, outperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Host Hotels 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 Beats on Q2 FFO & Revenues, Doubles Dividend

Host Hotels & Resorts reported adjusted FFO per share of 58 cents, surpassing the Zacks Consensus Estimate of 49 cents. The figure compared favorably with the prior-year quarter’s 12 cents.

Results reflect better-than-anticipated top-line growth, mainly driven by leisure travel with strong rates at resort properties. Additionally, urban markets witnessed an increase in group demand sequentially. HST also doubled its quarterly dividend.

Host Hotels generated total revenues of $1.4 billion, beating the Zacks Consensus Estimate of $1.3 million. The top line also improved significantly from the prior-year quarter’s $649.0 million.

Behind the Headlines

During the second quarter, leisure travel improved, which led to strong rates at resort properties. Moreover, group demand in the urban markets rose sequentially. Host Hotels’ all-owned-hotel RevPAR was $219.3 million in the reported quarter, almost doubling from the prior-year quarter’s $110.7 million.

All-owned-hotel EBITDA was $510 million, surging from $151 million reported a year ago. The figure also surpassed the second-quarter 2019 tally of $427 million, owing to positive quarterly sequential improvements in RevPAR and operations.

The average room rate improved to $296.9 from $246.5 in the year-ago quarter and $258.7 in second-quarter 2019.

The all-owned-hotel average occupancy percentage in the quarter remained strong at 73.9%. The figure compared favorably with the prior-year quarter’s 44.9%. Further, average occupancy was close enough to 81.8% recorded in second-quarter 2019.

The room revenues from the transient business were $531 million, marking a rise of 22.9% from the prior quarter. Moreover, it registered growth of 9.6% from the revenues recognized in the same period in 2019.

Room revenues from the group segment increased 56.5% to $288 million sequentially. However, it declined 2.9% from the second-quarter 2019 levels.

The room revenues for contract businesses climbed to $26 million sequentially, reflecting a rise of 23.8%. When compared with second-quarter 2019 levels, it grew 2.1%.

Moreover, room nights for its transient and group businesses declined 10.3% and 8.5%, respectively, while it increased 12.4% for the contract business from the respective same-period levels of 2019. Host Hotels’ transient, group and contract businesses accounted for roughly 61%, 35% and 4% of its 2019 room sales, respectively.

In April 2022, Host Hotels sold the Sheraton New York Times Square Hotel for $373 million. This included a $250 million bridge loan provided by the company to the buyer. It also disposed of YVE Hotel Miami for $50 million, including $1 million of FF&E funds.

Balance-Sheet Position

Host Hotels exited second-quarter 2022 with cash and cash equivalents of $699 million, up from $266 million as of Mar 31, 2022.

HST’s liquidity totaled $2.4 billion, including FF&E escrow reserves of $179 million as of Jun 30, 2022. It had $1.5 billion available under the revolver portion of the credit facility as of the same date.

It has no significant debt maturities until 2024.

Capital Expenditure

During the six months ended Jun 30, 2022, Host Hotels incurred $240 million of capital expenditure. Of this, $162 million was return on investment project spend and $78 million was renewal and replacement project expenditure.

2022 Guidance

HST projects full-year adjusted FFO to lie in the range of $1.71-$1.80.

It expects all owned-hotel RevPAR in the range of $191-$195 million for full-year 2022. Adjusted EBITDAre is estimated between $1.45 billion and $1.51 billion.

For full-year 2022, management expects to incur a total capital expenditure of $500-$575 million.

How Have Estimates Been Moving Since Then?

It turns out, estimates review have trended upward during the past month.

VGM Scores

At this time, Host Hotels has a strong Growth Score of A, a grade with the same score on the 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 A. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Host Hotels has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.

Performance of an Industry Player

Host Hotels belongs to the Zacks REIT and Equity Trust - Other industry. Another stock from the same industry, Extra Space Storage (EXR Quick QuoteEXR - Free Report) , has gained 2.9% over the past month. More than a month has passed since the company reported results for the quarter ended June 2022.

Extra Space Storage reported revenues of $474.99 million in the last reported quarter, representing a year-over-year change of +25.5%. EPS of $1.73 for the same period compares with $1.64 a year ago.

Extra Space Storage is expected to post earnings of $2.16 per share for the current quarter, representing a year-over-year change of +16.8%. Over the last 30 days, the Zacks Consensus Estimate has changed +1.5%.

The overall direction and magnitude of estimate revisions translate into a Zacks Rank #1 (Strong Buy) for Extra Space Storage. Also, the stock has a VGM Score of D.