Hilton (HLT) Gears Up for Q2 Earnings: What's in Store?

Core Viewpoint - Hilton Worldwide Holdings Inc. is expected to report strong second-quarter 2024 results, with anticipated earnings and revenue growth driven by steady leisure demand and improvements in revenue per available room (RevPAR) [1][3]. Financial Estimates - The Zacks Consensus Estimate for second-quarter earnings is $1.85 per share, reflecting a 13.5% increase from $1.63 in the same quarter last year [2]. - Revenue is projected at $2.97 billion, indicating an 11.8% growth compared to the prior-year quarter [2]. Factors Influencing Performance - Hilton's performance is likely supported by increased occupancy rates and average daily rates, alongside a fee-based business model and development initiatives [3]. - The company expects RevPAR growth between 2% and 4% year over year, with a model prediction of a 2.6% increase [3]. - Strong leisure demand and recovery in international travel are expected to contribute to RevPAR gains in various regions, including Europe and Asia Pacific [3]. Revenue Contributions - Significant contributions to the second-quarter top line are anticipated from various fee categories, including Franchise and licensing fees, Base and other management fees, and Incentive Management Fees, with expected year-over-year increases of 13.6%, 49.3%, and 22.9%, respectively [4]. - Hilton forecasts net income between $443 million and $457 million, with adjusted EBITDA expected to be between $890 million and $910 million [4]. Earnings Prediction Model - The company's earnings model suggests a likely earnings beat, supported by a positive Earnings ESP of +0.58% and a Zacks Rank of 3 (Hold) [5]. - The combination of these factors enhances the likelihood of exceeding earnings expectations [5]. Comparable Stocks - Hilton Grand Vacations (HGV) shows a favorable Earnings ESP of +16.12% and a Zacks Rank of 1, with expected earnings growth of 4.7% for the second quarter [6]. - Choice Hotels International, Inc. (CHH) has an Earnings ESP of +1.51% and a Zacks Rank of 2, with projected earnings growth of 6.9% [7].