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Hyatt Hotels (H) Q3 Earnings Preview: What's in the Cards?
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Hyatt Hotels Corporation (H - Free Report) is scheduled to report third-quarter 2016 results on Nov 3, before the opening bell.
Last quarter, Hyatt Hotels posted a positive earnings surprise of 39.13%. In fact, the company’s earnings surpassed the Zacks Consensus Estimate in three of the last four quarters, with an average beat of 15.66%.
Let’s see how things are shaping up for this announcement.
Factors Likely to Influence this Quarter
Hyatt Hotels stands to gain from increased demand in the U.S. which is supported by stronger economic metrics and the increasingly positive employment scenario in the country. Moreover, improved transient demand and greater pricing power have been driving Revenue per Available Room (RevPAR) over the past few quarters. We expect the trend to have continued in the third quarter as well.
Moreover, the company reported at the end of the second quarter that they had 10% more group business on the books for their U.S. hotels for the third quarter, compared to the same time last year.
However, lingering global uncertainty in certain economies is likely to limit revenue growth. Further, a slowdown in the Chinese economy is expected to be a major blow to Hyatt Hotels’ top line, as China is one of its key markets. Also, the company’s business in New York continues to be affected by an oversupply of hotels.
Additionally, despite the weakening of the U.S. dollar in 2016, negative currency translation is expected to reduce the value of overseas sales, given Hyatt Hotels’ significant international presence, hurting revenues and profits in the to-be-reported quarter.
Our proven model does not conclusively show that Hyatt Hotels is likely to beat the Zacks Consensus Estimate this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. Unfortunately, that is not the case here as elaborated below. Please check our Earnings ESP Filter that enables you to find stocks that are expected to come out with earnings surprises.
Zacks ESP: Hyatt Hotels has an Earnings ESP of 0.00%. This is because the Most Accurate estimate and the Zacks Consensus Estimate both stand at 28 cents.
Zacks Rank: Hyatt Hotels has a Zacks Rank #3. This when combined with 0.00% ESP makes earnings prediction uncertain.
Note that we caution against stocks with a Zacks Rank #4 or 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks to Consider
Here are some companies to consider as our model shows they have the right combination of elements to post an earnings beat this quarter:
Boyd Gaming Corporation (BYD - Free Report) has an Earnings ESP of +16.67% and a Zacks Rank #2.
Marriott International, Inc. (MAR - Free Report) has an Earnings ESP of +4.44% and a Zacks Rank #3.
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Hyatt Hotels (H) Q3 Earnings Preview: What's in the Cards?
Hyatt Hotels Corporation (H - Free Report) is scheduled to report third-quarter 2016 results on Nov 3, before the opening bell.
Last quarter, Hyatt Hotels posted a positive earnings surprise of 39.13%. In fact, the company’s earnings surpassed the Zacks Consensus Estimate in three of the last four quarters, with an average beat of 15.66%.
Let’s see how things are shaping up for this announcement.
Factors Likely to Influence this Quarter
Hyatt Hotels stands to gain from increased demand in the U.S. which is supported by stronger economic metrics and the increasingly positive employment scenario in the country. Moreover, improved transient demand and greater pricing power have been driving Revenue per Available Room (RevPAR) over the past few quarters. We expect the trend to have continued in the third quarter as well.
Moreover, the company reported at the end of the second quarter that they had 10% more group business on the books for their U.S. hotels for the third quarter, compared to the same time last year.
However, lingering global uncertainty in certain economies is likely to limit revenue growth. Further, a slowdown in the Chinese economy is expected to be a major blow to Hyatt Hotels’ top line, as China is one of its key markets. Also, the company’s business in New York continues to be affected by an oversupply of hotels.
Additionally, despite the weakening of the U.S. dollar in 2016, negative currency translation is expected to reduce the value of overseas sales, given Hyatt Hotels’ significant international presence, hurting revenues and profits in the to-be-reported quarter.
HYATT HOTELS CP Price and EPS Surprise
HYATT HOTELS CP Price and EPS Surprise | HYATT HOTELS CP Quote
Earnings Whispers
Our proven model does not conclusively show that Hyatt Hotels is likely to beat the Zacks Consensus Estimate this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. Unfortunately, that is not the case here as elaborated below. Please check our Earnings ESP Filter that enables you to find stocks that are expected to come out with earnings surprises.
Zacks ESP: Hyatt Hotels has an Earnings ESP of 0.00%. This is because the Most Accurate estimate and the Zacks Consensus Estimate both stand at 28 cents.
Zacks Rank: Hyatt Hotels has a Zacks Rank #3. This when combined with 0.00% ESP makes earnings prediction uncertain.
Note that we caution against stocks with a Zacks Rank #4 or 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks to Consider
Here are some companies to consider as our model shows they have the right combination of elements to post an earnings beat this quarter:
Vail Resorts, Inc. (MTN - Free Report) has an Earnings ESP of +4.46% and sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Boyd Gaming Corporation (BYD - Free Report) has an Earnings ESP of +16.67% and a Zacks Rank #2.
Marriott International, Inc. (MAR - Free Report) has an Earnings ESP of +4.44% and a Zacks Rank #3.
Confidential from Zacks
Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>