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Hilton Worldwide Holdings Inc. (HLT) Up 15.2% 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 15.2% 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 its most recent earnings report in order to get a better handle on the important catalysts.
Hilton Q3 Earnings in Line, Revenues Beat Estimates
Hilton reported third-quarter 2023 results, wherein earnings came in line with the Zacks Consensus Estimate but revenues surpassed the same. Both metrics increased on a year-over-year basis.
Q3 in Detail
Hilton reported adjusted earnings per share (EPS) of $1.67, which met the Zacks Consensus Estimate. In the prior-year quarter, the company reported adjusted EPS of $1.31.
Quarterly revenues of $2,673 million outpaced the Zacks Consensus Estimate of $2,606 million and increased 12.9% from the year-ago quarter’s levels. During the quarter, franchise and licensing fees improved 12.2% year over year. Owned and leased hotels, base and other management fees, and incentive management fees rose 13.6%, 6.6% and 21.2% year over year, respectively.
RevPAR and Adjusted EBITDA
In the quarter under review, system-wide comparable revenue per available room (RevPAR) grew 6.8% year over year (on a currency-neutral basis) owing to an increase in occupancy and average daily rate. Also, RevPAR was up 11.4% from 2019 levels.
Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) during the third quarter was $834 million, up 13.9% year over year.
Balance Sheet
As of Sep 30, 2023, cash and cash equivalent balance (including restricted cash) came in at $779 million compared with $883 million reported in the previous quarter. HLT reported long-term debt outstanding of $8.8 billion (sequentially flat), excluding deferred financing costs and discounts, with a weighted average interest rate of approximately 4.57%.
During the quarter, Hilton repurchased 4.5 million shares of its common stock worth approximately $684 million.
Management declared a quarterly cash dividend of 15 cents per share. The dividend will be payable on (or before) Dec 29 to shareholders of record as of Nov 17, 2023.
Business Updates
During third-quarter 2023, Hilton opened 107 new hotels. It also achieved net unit growth of nearly 15,700 rooms.
As of Sep 30, 2023, Hilton's development pipeline comprised nearly 3,190 hotels, with almost 457,300 rooms across 119 countries and territories, including 29 countries and territories where it currently has no running hotels.
Outlook
For fourth-quarter 2023, HLT anticipates net income in the range of $374-$388 million. Adjusted EBITDA is expected to be between $739 million and $759 million. It projects third-quarter EPS (adjusted for special items) to be between $1.51 and $1.56.
For fourth-quarter 2023, management forecasts system-wide RevPAR to increase in the 4.5-5.5% band on a year-over-year basis.
For 2023, HLT estimates net income in the range of $1,375-$1,389 million. Earlier, the metric was anticipated in the $1,387-$1,422 million band.
Adjusted EBITDA is expected to be between $3,025 million and $3,045 million. Previously, it was suggested to be between $2,975 million and $3,025 million. HLT continues to suggest general and administrative expenses for 2023 in the range of $390-$410 million.
The company expects 2023 EPS (adjusted for special items) in the range of $6.04-$6.09 compared with the previous projection of $5.93-$6.06. Full-year capital return is anticipated to be between $2.4 billion and $2.6 billion, up from the prior expectation of $1.8-$2.2 billion.
Management anticipates 2023 system-wide RevPAR to increase 12-12.5% year over year compared with the earlier anticipation of 10-12%.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates revision.
VGM Scores
Currently, Hilton Worldwide Holdings Inc. has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with a D. Charting a somewhat similar path, 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 B. 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 has been net zero. Notably, Hilton Worldwide Holdings Inc. has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Hilton Worldwide Holdings Inc. (HLT) Up 15.2% 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 15.2% 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 its most recent earnings report in order to get a better handle on the important catalysts.
Hilton Q3 Earnings in Line, Revenues Beat Estimates
Hilton reported third-quarter 2023 results, wherein earnings came in line with the Zacks Consensus Estimate but revenues surpassed the same. Both metrics increased on a year-over-year basis.
Q3 in Detail
Hilton reported adjusted earnings per share (EPS) of $1.67, which met the Zacks Consensus Estimate. In the prior-year quarter, the company reported adjusted EPS of $1.31.
Quarterly revenues of $2,673 million outpaced the Zacks Consensus Estimate of $2,606 million and increased 12.9% from the year-ago quarter’s levels. During the quarter, franchise and licensing fees improved 12.2% year over year. Owned and leased hotels, base and other management fees, and incentive management fees rose 13.6%, 6.6% and 21.2% year over year, respectively.
RevPAR and Adjusted EBITDA
In the quarter under review, system-wide comparable revenue per available room (RevPAR) grew 6.8% year over year (on a currency-neutral basis) owing to an increase in occupancy and average daily rate. Also, RevPAR was up 11.4% from 2019 levels.
Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) during the third quarter was $834 million, up 13.9% year over year.
Balance Sheet
As of Sep 30, 2023, cash and cash equivalent balance (including restricted cash) came in at $779 million compared with $883 million reported in the previous quarter. HLT reported long-term debt outstanding of $8.8 billion (sequentially flat), excluding deferred financing costs and discounts, with a weighted average interest rate of approximately 4.57%.
During the quarter, Hilton repurchased 4.5 million shares of its common stock worth approximately $684 million.
Management declared a quarterly cash dividend of 15 cents per share. The dividend will be payable on (or before) Dec 29 to shareholders of record as of Nov 17, 2023.
Business Updates
During third-quarter 2023, Hilton opened 107 new hotels. It also achieved net unit growth of nearly 15,700 rooms.
As of Sep 30, 2023, Hilton's development pipeline comprised nearly 3,190 hotels, with almost 457,300 rooms across 119 countries and territories, including 29 countries and territories where it currently has no running hotels.
Outlook
For fourth-quarter 2023, HLT anticipates net income in the range of $374-$388 million. Adjusted EBITDA is expected to be between $739 million and $759 million. It projects third-quarter EPS (adjusted for special items) to be between $1.51 and $1.56.
For fourth-quarter 2023, management forecasts system-wide RevPAR to increase in the 4.5-5.5% band on a year-over-year basis.
For 2023, HLT estimates net income in the range of $1,375-$1,389 million. Earlier, the metric was anticipated in the $1,387-$1,422 million band.
Adjusted EBITDA is expected to be between $3,025 million and $3,045 million. Previously, it was suggested to be between $2,975 million and $3,025 million. HLT continues to suggest general and administrative expenses for 2023 in the range of $390-$410 million.
The company expects 2023 EPS (adjusted for special items) in the range of $6.04-$6.09 compared with the previous projection of $5.93-$6.06. Full-year capital return is anticipated to be between $2.4 billion and $2.6 billion, up from the prior expectation of $1.8-$2.2 billion.
Management anticipates 2023 system-wide RevPAR to increase 12-12.5% year over year compared with the earlier anticipation of 10-12%.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates revision.
VGM Scores
Currently, Hilton Worldwide Holdings Inc. has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with a D. Charting a somewhat similar path, 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 B. 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 has been net zero. Notably, Hilton Worldwide Holdings Inc. has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.