Advertisement
U.S. markets open in 4 hours 23 minutes
  • S&P Futures

    5,304.25
    -4.00 (-0.08%)
     
  • Dow Futures

    40,140.00
    -4.00 (-0.01%)
     
  • Nasdaq Futures

    18,481.25
    -22.50 (-0.12%)
     
  • Russell 2000 Futures

    2,134.40
    -4.00 (-0.19%)
     
  • Crude Oil

    81.82
    +0.47 (+0.58%)
     
  • Gold

    2,215.80
    +3.10 (+0.14%)
     
  • Silver

    24.54
    -0.21 (-0.86%)
     
  • EUR/USD

    1.0790
    -0.0040 (-0.37%)
     
  • 10-Yr Bond

    4.1960
    0.0000 (0.00%)
     
  • Vix

    12.95
    +0.17 (+1.33%)
     
  • GBP/USD

    1.2604
    -0.0034 (-0.27%)
     
  • USD/JPY

    151.4330
    +0.1870 (+0.12%)
     
  • Bitcoin USD

    70,771.95
    +1,288.91 (+1.86%)
     
  • CMC Crypto 200

    885.54
    0.00 (0.00%)
     
  • FTSE 100

    7,955.58
    +23.60 (+0.30%)
     
  • Nikkei 225

    40,168.07
    -594.66 (-1.46%)
     

Why Is Hilton Worldwide Holdings Inc. (HLT) Up 3.9% Since Last Earnings Report?

A month has gone by since the last earnings report for Hilton Worldwide Holdings Inc. (HLT). Shares have added about 3.9% in that time frame, underperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Hilton Worldwide Holdings Inc. due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.

Hilton Q3 Earnings & Revenues Beat Estimates, Rise Y/Y

Hilton reported solid third-quarter 2022 results, with earnings and revenues beating the Zacks Consensus Estimate and rising year over year.

Q3 in Detail

Hilton reported adjusted earnings per share (EPS) of $1.31, beating the Zacks Consensus Estimate of $1.25. In the prior-year quarter, the company reported an adjusted EPS of 78 cents.

Quarterly revenues of $2,368 million surpassed the consensus mark of $2,367 million. Moreover, the top line increased 35.4% from the year-ago quarter’s levels.

RevPAR and Adjusted EBITDA

In the quarter under review, system-wide comparable revenue per available room (RevPAR) increased 29.9% year over year (on a currency-neutral basis), owing to an increase in occupancy and average daily rate (ADR). Also, RevPAR was up 5% from 2019 levels.

During the quarter, fee revenues increased 33% year over year. Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) during the third quarter was $732 million compared with $519 million reported in the prior-year quarter.

Balance Sheet

As of Sep 30, 2022, cash and cash equivalent balance (including restricted cash) amounted to $1,362 million compared with $1,254 million reported in the previous quarter. The company reported long-term debt outstanding of $8.8 billion (sequentially flat), excluding deferred financing costs and discounts, with a weighted average interest rate of approximately 4.29%.

During the quarter, the company repurchased 4 million shares of its common stock worth approximately $497 million.

The company declared a quarterly cash dividend of 15 cents per share. The dividend will be payable on (or before) Dec 30, 2022, to shareholders of record as of Nov 10, 2022.

Business Updates

During third-quarter 2022, Hilton opened 80 new hotels. It also achieved net unit growth of nearly 12,100 rooms. During the quarter, the company unveiled its 600th Hilton Hotels & Resorts property by opening the Curio Collection by the Hilton brand. Additionally, it announced the opening of Waldorf Astoria Kuwait, expanding its luxury portfolio.

As of Sep 30, 2022, Hilton's development pipeline comprised nearly 2,810 hotels, with nearly 416,000 rooms across 112 countries and territories — including 29 countries and territories where it currently has no running hotels. Moreover, 242,600 rooms in the development pipeline were located outside the United States and 204,200 rooms were under construction. For 2022, the company expects net unit growth to be nearly 5%.

Outlook

For fourth-quarter 2022, the company anticipates net income in the range of $295-$316 million. Adjusted EBITDA is expected to be between $641 million and $671 million. The company expects fourth-quarter diluted EPS (adjusted for special items) to be between $1.15 and $1.23.

For the fourth quarter, the company anticipates system-wide RevPAR to increase between 19- 23% on a year-over-year basis. Also, the metric is expected to increase 2-6% from 2019 levels.

For 2022, the company anticipates net income in the range of $1,219-$1,240 million, up from the previous estimate of $1,146-$1,216 million. Adjusted EBITDA is expected to be between $2,500-$2,530 million, up from the previous estimate of $2,400-$2,500 million. General and administrative expenses for 2022 are now expected in the range of $380-$400 million compared with the previous projection of $400 million and $420 million.

The company expects 2022 diluted EPS (adjusted for special items) in the range of $4.46-$4.54, up from the prior estimate of $4.21-$4.46. Full-year capital return is anticipated to be between $1.5 billion and $1.9 billion.

The company anticipates 2022 system-wide RevPAR to increase between 40-43% (compared with the previous projection of 37-43%) on a year-over-year basis. However, the metric is expected to decline 1-3% from 2019 levels.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed an upward trend in estimates review.

VGM Scores

Currently, Hilton Worldwide Holdings Inc. has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with a C. Following the exact same course, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Hilton Worldwide Holdings Inc. has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Hilton Worldwide Holdings Inc. (HLT) : Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research

Advertisement