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Host Hotels Gears Up to Report Q3 Earnings: Key Factors to Consider

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Host Hotels & Resorts, Inc. (HST - Free Report) is scheduled to release third-quarter 2024 earnings results on Nov. 6, after market close. While the company’s quarterly results are likely to display a year over year rise in revenues, funds from operations (FFO) per share might display a decline.

Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.

In the previous quarter, this Bethesda, MD-based lodging real estate investment trust (REIT) reported an adjusted FFO per share of 57 cents, surpassing the Zacks Consensus Estimate by a penny. Results reflected a year-over-year rise in revenues.

Over the trailing four quarters, Host Hotels’ adjusted FFO per share surpassed estimates on three occasions and met in the remaining period, the average surprise being 7.5%. The graph below depicts this surprise history:

 

 

Factors to Consider Ahead of HST’s Upcoming Results

Host Hotels enjoys a portfolio of luxury and upper-scale hotels across the top U.S. Markets and the Sunbelt region. These properties are strategically located in central business districts of major cities near airports and resort/conference destinations, which drives demand.

Host Hotels’ strategic capital allocations to improve its portfolio quality and strengthen its position in the United States, where it has a greater scale and competitive advantage, are likely to have given it an edge and drive margin expansion.

However, high interest expenses are likely to have been a spoilsport for HST during the to-be-reported quarter.

HST’s Projections

The Zacks Consensus Estimate for HST’s quarterly revenues is presently pegged at $1.29 billion, implying growth of 6.3% from the prior-year period’s reported figure.

However, the consensus mark for the average occupancy rate in the third quarter is pegged at 71.15%, suggesting a slight decline from the prior-year quarter’s reported figure of 71.80%. The Zacks Consensus Estimate for quarterly RevPAR stands at $201.1, indicating a marginal decrease from the year-ago quarter.

We expect third-quarter 2024 interest expenses to rise 16.6% year over year.

The company’s activities during the to-be-reported quarter were inadequate to garner analysts’ confidence. The Zacks Consensus Estimate for FFO per share has remained unrevised at 36 cents in the past month. The figure implies a 12.2% fall from the year-ago reported number.

What Our Quantitative Model Predicts

Our proven model does not conclusively predict a surprise in terms of FFO per share for Host Hotels this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an FFO beat, which is not the case here.

Host Hotels currently has an Earnings ESP of -3.92% and carries a Zacks Rank of 3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks That Warrant a Look

Here are two stocks from the broader REIT sector — Sun Communities (SUI - Free Report) and DiamondRock Hospitality (DRH - Free Report) — that you may want to consider, as our model shows that these have the right combination of elements to report a surprise this quarter.

Sun Communities is slated to report quarterly numbers on Nov. 6. SUI has an Earnings ESP of +0.51% and carries a Zacks Rank of 3 presently. You can see the complete list of today’s Zacks #1 Rank stocks here.

DiamondRock Hospitality, scheduled to report quarterly numbers on Nov. 7, has an Earnings ESP of +1.01% and carries a Zacks Rank of 3.

Note: Anything related to earnings presented in this write-up represents funds from operations (FFO), a widely used metric to gauge the performance of REITs.


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