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Host Hotels (HST) to Post Q2 Earnings: What's in the Cards?
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Host Hotels & Resorts, Inc. (HST - Free Report) is scheduled to release second-quarter 2023 earnings on Aug 3, after market close. While the quarterly results are likely to display year-over-year growth in revenues, funds from operations (FFO) per share might exhibit a decline.
In the previous quarter, the Bethesda, MD-based lodging real estate investment trust (REIT) delivered a surprise of 14.58% in terms of adjusted FFO per share. The quarterly results reflected better-than-anticipated revenues, aided by continued strong leisure demand and growth in the city center markets.
Over the trailing four quarters, Host Hotels’ adjusted FFO per share surpassed estimates on three occasions and missed once, the average beat being 8.18%. The graph below depicts this surprise history:
Host Hotels & Resorts, Inc. Price and EPS Surprise
During the second quarter, Host Hotels is likely to have capitalized on the improving lodging industry demand-supply fundamentals in the wake of the pandemic. The continued strength in the recovery of leisure travel demand has been driving the demand for HST’s well-positioned properties in markets with solid demand generators like central business districts of main cities, close to airports and in resort/conference destinations.
Also, corporate demand from small and medium-sized businesses, representing a large share, is expected to have been healthy during the quarter, contributing to growth in rates.
HST is expected to have witnessed occupancy growth at its properties, backed by this rebound in demand, aiding revenue per available room (RevPAR) growth during the quarter.
The Zacks Consensus Estimate for quarterly RevPAR stands at $230.69, indicating an increase of 5.2% from the year-ago quarter’s reported figure of $219.30. Our estimate is pegged at $229.92. The consensus mark for the average occupancy rate is pegged at 74.9%, suggesting an improvement from the prior-year quarter’s reported figure of 73.9%. We expect the average occupancy rate for the quarter to be 71.8%.
The Zacks Consensus Estimate for HST’s second-quarter revenues is presently pegged at $1.42 billion, implying growth of 3.04% from the prior-year period’s reported figure.
HST is likely to have continued with its acquisition and development activities during the quarter to bolster its external growth. Its capital-recycling efforts and solid balance sheet position are anticipated to have supported such activities.
However, a tepid recovery in the business transient and group travel demand due to persistent macroeconomic uncertainty and high interest expenses might have impeded the company’s quarterly performance to some extent. We expect second-quarter 2023 interest expenses to rise 28.7% year over year.
The company’s activities during the to-be-reported quarter were inadequate to garner analysts’ confidence. The Zacks Consensus Estimate for the FFO per share has been unchanged at 56 cents over the past two months. Moreover, the figure implies a year-over-year decline of 3.5%.
Earning Whispers
Our proven model does not conclusively predict a surprise in terms of FFO per share for Host Hotels this season. The combination of a positive Earnings ESP and a Zacks Rank #3 (Hold) or higher — increases the odds of a beat. However, that’s not the case here.
Earnings ESP: HST has an Earnings ESP of -1.25%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Here are some stocks that are worth considering from the REIT sector, as our model shows that these have the right combination of elements to deliver a surprise this reporting cycle:
Ventas (VTR - Free Report) is scheduled to report quarterly numbers on Aug 3. VTR has an Earnings ESP of +1.75% and a Zacks Rank #2 (Buy) currently.
Ryman Hospitality Properties (RHP - Free Report) is slated to report quarterly numbers on Aug 3. RHP has an Earnings ESP of +3.87% and carries a Zacks Rank #1 presently.
Americold Realty Trust (COLD - Free Report) is scheduled to report quarterly figures on Aug 3. COLD currently has an Earnings ESP of +1.96% and a Zacks Rank #3.
Note: Anything related to earnings presented in this write-up represent funds from operations (FFO) — a widely used metric to gauge the performance of REITs.
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Host Hotels (HST) to Post Q2 Earnings: What's in the Cards?
Host Hotels & Resorts, Inc. (HST - Free Report) is scheduled to release second-quarter 2023 earnings on Aug 3, after market close. While the quarterly results are likely to display year-over-year growth in revenues, funds from operations (FFO) per share might exhibit a decline.
In the previous quarter, the Bethesda, MD-based lodging real estate investment trust (REIT) delivered a surprise of 14.58% in terms of adjusted FFO per share. The quarterly results reflected better-than-anticipated revenues, aided by continued strong leisure demand and growth in the city center markets.
Over the trailing four quarters, Host Hotels’ adjusted FFO per share surpassed estimates on three occasions and missed once, the average beat being 8.18%. The graph below depicts this surprise history:
Host Hotels & Resorts, Inc. Price and EPS Surprise
Host Hotels & Resorts, Inc. price-eps-surprise | Host Hotels & Resorts, Inc. Quote
Factors at Play
During the second quarter, Host Hotels is likely to have capitalized on the improving lodging industry demand-supply fundamentals in the wake of the pandemic. The continued strength in the recovery of leisure travel demand has been driving the demand for HST’s well-positioned properties in markets with solid demand generators like central business districts of main cities, close to airports and in resort/conference destinations.
Also, corporate demand from small and medium-sized businesses, representing a large share, is expected to have been healthy during the quarter, contributing to growth in rates.
HST is expected to have witnessed occupancy growth at its properties, backed by this rebound in demand, aiding revenue per available room (RevPAR) growth during the quarter.
The Zacks Consensus Estimate for quarterly RevPAR stands at $230.69, indicating an increase of 5.2% from the year-ago quarter’s reported figure of $219.30. Our estimate is pegged at $229.92. The consensus mark for the average occupancy rate is pegged at 74.9%, suggesting an improvement from the prior-year quarter’s reported figure of 73.9%. We expect the average occupancy rate for the quarter to be 71.8%.
The Zacks Consensus Estimate for HST’s second-quarter revenues is presently pegged at $1.42 billion, implying growth of 3.04% from the prior-year period’s reported figure.
HST is likely to have continued with its acquisition and development activities during the quarter to bolster its external growth. Its capital-recycling efforts and solid balance sheet position are anticipated to have supported such activities.
However, a tepid recovery in the business transient and group travel demand due to persistent macroeconomic uncertainty and high interest expenses might have impeded the company’s quarterly performance to some extent. We expect second-quarter 2023 interest expenses to rise 28.7% year over year.
The company’s activities during the to-be-reported quarter were inadequate to garner analysts’ confidence. The Zacks Consensus Estimate for the FFO per share has been unchanged at 56 cents over the past two months. Moreover, the figure implies a year-over-year decline of 3.5%.
Earning Whispers
Our proven model does not conclusively predict a surprise in terms of FFO per share for Host Hotels this season. The combination of a positive Earnings ESP and a Zacks Rank #3 (Hold) or higher — increases the odds of a beat. However, that’s not the case here.
Earnings ESP: HST has an Earnings ESP of -1.25%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: HST currently carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Stocks That Warrant a Look
Here are some stocks that are worth considering from the REIT sector, as our model shows that these have the right combination of elements to deliver a surprise this reporting cycle:
Ventas (VTR - Free Report) is scheduled to report quarterly numbers on Aug 3. VTR has an Earnings ESP of +1.75% and a Zacks Rank #2 (Buy) currently.
Ryman Hospitality Properties (RHP - Free Report) is slated to report quarterly numbers on Aug 3. RHP has an Earnings ESP of +3.87% and carries a Zacks Rank #1 presently.
Americold Realty Trust (COLD - Free Report) is scheduled to report quarterly figures on Aug 3. COLD currently has an Earnings ESP of +1.96% and a Zacks Rank #3.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
Note: Anything related to earnings presented in this write-up represent funds from operations (FFO) — a widely used metric to gauge the performance of REITs.