Yahoo Finance What's in Store for Hilton Worldwide (HLT) in Q2? - Analyst Blog
Hilton Worldwide Holdings Inc. HLT is scheduled to report second-quarter 2015 results before the opening bell on Jul 29. In the last quarter, the company’s earnings came in line with the Zacks Consensus Estimate. Over the trailing four quarters, the company has posted a positive average earnings surprise of 1.40%. Let’s see how things are shaping up for this announcement.
Factors at Play
Hilton’s exposure in the U.S., as well as its improving group business trends are expected to further drive RevPAR in the soon-to-be reported quarter. Internationally, Hilton is aggressively expanding in high-growth emerging markets like China. Meanwhile, the Middle East and Africa are also expected to contribute due to an improvement in Egypt. In fact, the company expects adjusted earnings in the range of 21 cents to 23 cents, higher than the year-ago earnings of 20 cents.
However, its international presence makes it vulnerable to lingering political uncertainty, sluggish economy and other such issues in countries like Argentina, Brazil and Russia. Meanwhile, currency headwinds also remain. A stronger U.S. dollar reduces the value of overseas sales when they are converted to U.S. currency. These factors would hurt revenues and profits of the company in the soon-to-be reported quarter.
Earnings Whispers?
Our proven model does not conclusively show that Hilton Worldwide is likely to beat earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank of #1 (Strong Buy), #2 (Buy) or #3 (Hold) for this to happen. That is not the case here as you will see below.
Zacks ESP: Hilton Worldwide has a 0.00% Earnings ESP. This is because both the Most Accurate estimate and the Zacks Consensus Estimate stand at 22 cents.
Zacks Rank: Hilton Worldwide’s Zacks Rank #4 (Sell), when combined with a 0.00% ESP, complicates our surprise prediction.
We note that the Sell-rated stocks (#4 and #5) should never be considered going into an earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks to Consider
Here are some companies in the broader consumer discretionary sector that investors may consider, as our model shows that they have the right combination of elements to post an earnings beat this quarter:
Caleres, Inc. CAL with an Earnings ESP of +6.67% and a Zacks Rank #1 (Strong Buy).
Electronic Arts Inc. EA with an Earnings ESP of +22.22% and a Zacks Rank #1.
Guess' Inc. GES with an Earnings ESP of +6.67% and a Zacks Rank #1.
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HILTON WW HLDG (HLT): Free Stock Analysis Report
GUESS INC (GES): Free Stock Analysis Report
ELECTR ARTS INC (EA): Free Stock Analysis Report
CALERES INC (CAL): Free Stock Analysis Report
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