Dismal RevPAR Likely to Reflect on Hilton (HLT) Q1 Earnings

Hilton Worldwide Holdings Inc. HLT is scheduled to report first-quarter 2020 results on May 7, before the opening bell. In the last reported quarter, the company’s earnings surpassed the Zacks Consensus Estimate by 5.3%.

Q1 Estimates

The Zacks Consensus Estimate for first-quarter earnings is pegged at 58 cents per share, suggesting a decline of 27.5% from 80 cents in the year-ago period. Notably, earnings estimates for the quarter have witnessed sharp downward revisions in the past 30 days. The consensus mark for revenues stands at $1.76 billion, indicating a decline of 20.3% from the prior-year reported figure.

Factors at Play

Hilton’s first-quarter results are likely to reflect negative impact of the coronavirus pandemic. The company’s occupancy and RevPAR are likely to have been impacted significantly by the coronavirus outbreak. Moreover, the company’s results in the quarter to be reported might reflect decline in Franchise and licensing fees, Incentive management fees, and Base and other management fees. Further, higher operating costs might get reflected in the first-quarter results.

Recently, the company provided preliminary first-quarter 2020 preliminary results. In first-quarter 2020, the company anticipates system-wide RevPAR to decline in the range of 22% to 24% owing to the coronavirus crisis. RevPAR in Americas and Europe, Middle East and Africa ("EMEA") are expected to decline in the range of 20% to 22%, each. Moreover, Asia Pacific is likely to witness RevPAR decrease between 43% and 45%.

Hilton Worldwide Holdings Inc. Price and EPS Surprise

Hilton Worldwide Holdings Inc. Price and EPS Surprise

Hilton Worldwide Holdings Inc. price-eps-surprise | Hilton Worldwide Holdings Inc. Quote

What the Zacks Model Unveils

Our proven model does not conclusively predict an earnings beat for Hilton this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Hilton currently has a Zacks Rank #5 (Strong Sell) and an Earnings ESP of -21.12%.

You can see the complete list of today’s Zacks #1 Rank stocks here.

Stock With Favorable Combinations 

Here are a few stocks from the Consumer Discretionary space that investors may consider as our model shows that these have the right combination of elements to post an earnings beat this quarter.

GP Strategies Corporation GPX has an Earnings ESP of +58.33% and a Zacks Rank #3, at present.

BJ's Wholesale Club Holdings, Inc. BJ currently has an Earnings ESP of +7.00% and a Zacks Rank #2.

Activision Blizzard, Inc. ATVI currently has an Earnings ESP of +10.39% and a Zacks Rank #3.

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