Hilton's (HLT) Q3 Earnings To Benefit From Solid RevPAR

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

Let’s discuss the factors that are likely to be reflected in the upcoming quarterly results.

Factors at Play

The company’s focus on unit expansion plans, robust loyalty program and strong revenue per available room (RevPAR) as well as average daily rate (ADR) growth has most likely driven the top line in the third quarter. The Zacks Consensus Estimate for the company’s third-quarter RevPAR suggests an increase of 0.9%. Also, system-wide ADR is expected to increase 0.7% year over year.

Moreover, robust performance by the company’s new brands including Home2 Suites, Tru by Hilton, Tapestry Collection are likely to show on third-quarter results.

Additionally, the company’s Franchise and licensing fees as well as Base and other management fees are likely to have contributed in the to-be-reported quarter. However, Incentive management fees are likely to have been an overhang.

This is clearly evident from the Zacks Consensus Estimate for third-quarter metrics. The consensus estimate for Franchise and licensing fees is pegged at $446 million, which suggests a 9.6% rise from the year-ago period. Also, the consensus mark for Base and other management fees suggests an increase of 2.5% year over year to $82 million. However, Incentive management fees is likely to remain flat year over year.

What Does the Zacks Model Unveil?

Our proven model does not conclusively predict an earnings beat for Hilton this season. 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 carries a Zacks Rank #3 and an Earnings ESP of -1.47%.

Stocks With Favorable Combinations

Here are some stocks from the Consumer Discretionary sector that investors may consider as our model shows that these have the right combination of elements to post earnings beat in this quarter:

Hasbro, Inc (NASDAQ:HAS) has an Earnings ESP of +1.44% and currently sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Melco Resorts & Entertainment Limited (NASDAQ:MLCO) currently has an Earnings ESP of +2.44% and a Zacks Rank #3.

Las Vegas Sands Corp (NYSE:LVS) has an Earnings ESP of +0.19% and a Zacks Rank #3 at present.

Biggest Tech Breakthrough in a Generation

Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.

A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft (NASDAQ:MSFT) in the 1990s. Zacks’ just-released special report reveals 7 stocks to watch. The report is only available for a limited time.

See 7 breakthrough stocks now>>