Hilton Worldwide Holdings Inc. (HLT) Up 2% Since Last Earnings Report: Can It Continue?
A months have passed since the last earnings report of Hilton Worldwide Holdings Inc. (HLT). Stocks rose about 2% during that time, outperforming the S&P 500.
Will the recent positive trend continue until its next results release, or is Hilton Worldwide Holdings Inc. likely to experience a pullback? Before we dive into how investors and analysts have reacted in recent times, let’s take a look at the latest earnings report to get a better understanding of the important factors.
Hilton Q1 profit and revenue not estimated, Fall Y / Y
Hilton reported disappointing first quarter 2021 results, in which both earnings and revenue not only missed Zacks’ consensus estimate, but also declined year over year. Notably, the company’s operations have been negatively affected by strict travel restrictions due to the resurgence of COVID-19 cases, particularly in Europe and the Asia-Pacific region.
Christopher J. Nassetta, President and CEO of Hilton, said, “We are pleased with our first quarter results. As increasing COVID-19 cases and tighter travel restrictions, especially in Europe and our Asia-Pacific region, weighed on demand in January and February, we saw significant improvement in March and April. We expect this positive momentum to continue as vaccines are more widely distributed and our customers once again feel safe while traveling. “
T1 in detail
In the quarter under review, Hilton reported adjusted earnings per share of 2 cents, lower than Zacks’ consensus estimate of 5 cents. In the quarter of the previous year, the company reported adjusted earnings per share of 74 cents.
Quarterly revenues of $ 874 million missed the consensus mark of $ 953 million. In addition, sales were down 54.5% compared to the quarter of the previous year. Both the results and the results were negatively affected by the coronavirus pandemic.
RevPAR and adjusted EBITDA
In the quarter under review, system-wide comparable revenue per available room (RevPAR) fell 38.4% on a currency neutral basis due to lower occupancy and lower occupancy. average daily rate (ADR). The downward trend was due to reimposed travel restrictions and the suspension of hotel operations (particularly in Europe and the Asia-Pacific region), due to the increase in coronavirus cases.
In the quarter under review, commission income fell by 34%. The company announced that its operations of nearly 275 properties primarily located in the United States and Europe were suspended for a period of time during the quarter.
Meanwhile, adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) in the first quarter was $ 198 million, compared to $ 363 million in the previous year quarter.
Cash, Debt and Share Buyback
As at March 31, 2021, the cash and cash equivalents (including restricted cash) balance was $ 2,447 million. The company had $ 10.1 billion in long-term debt outstanding, excluding deferred financing charges and discounts, with a weighted average interest rate of 3.66%.
Notably, Hilton opened 105 new hotels in the first quarter of 2021. It also achieved net unit growth of nearly 13,100 rooms. During the quarter, the company marked the opening of the 100th Curio Collection by Hilton and its 50th Tapestry Collection by Hilton.
As of March 31, 2021, Hilton’s development pipeline included more than 2,570 hotels, with nearly 399,000 rooms in 114 countries and territories, including 31 countries and territories where there are currently no hotels in operation. In addition, 241,000 rooms in development were located outside the United States and 204,000 rooms were under construction. As of April 28, 2021, 97% of global Hilton hotel properties were open.
How have the estimates evolved since?
Over the past month, investors have seen a downward trend in revised estimates.
Currently, Hilton Worldwide Holdings Inc. has a low growth score of F, but its Momentum score is doing much better with a C. Charting a somewhat similar path, the stock received a D rating on the value side , which places it in the bottom 40% for this investment strategy.
Overall, the stock has an overall VGM score of F. If you’re not strategy-focused, this score is the one you should be interested in.
Estimates are broadly trending down for the stock, and the magnitude of these revisions looks promising. Notably, Hilton Worldwide Holdings Inc. has a Zacks Rank # 3 (Hold). We expect the stock to come back online in the coming months.
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