Markets
NHI

Host Hotels (HST) Set to Beat on Q2 Earnings: Stock to Gain?

We expect Host Hotels & Resorts, Inc.HST to beat earnings estimates when it reports second-quarter 2016 results on Jul 29, before the market opens.

Last quarter, this Bethesda, MD-based lodging real estate investment trust ("REIT") delivered a 7.89% positive surprise. In fact, the company has a decent surprise history, having posted positive surprises in all the trailing four quarters, with an average beat of 6.95%. The Zacks Consensus Estimate for second-quarter funds from operations ("FFO") per share is currently pegged at 49 cents.

Why a Likely Positive Surprise?

Our proven model shows that Host Hotels has the right combination of two key ingredients for an earnings beat. A stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), #2 (Buy) or #3 (Hold) to beat estimates, and Host Hotels has the right mix.

Zacks ESP : Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, in this case respectively 50 cents and 49 cents, stands at +2.04%. This is a meaningful indicator of a likely positive surprise for the company.

Zacks Rank : Host Hotels carries a Zacks Rank #3.

We caution against stocks with Zacks Rank #4 or 5 (Sell rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

What's Driving the Better-than-Expected Earnings?

Host Hotels boasts a portfolio of upscale hotels across lucrative markets in the U.S. The company is anticipated to grow its revenue per available room (RevPAR) in 2016 from that of 2015 through value enhancement and rebranding initiatives. Further, the company stands to gain from the strength in employment & business investment as well as its strategic capital-recycling program.

Further, due to lower supply and less disruptions, the company is likely to perform well. In addition, adequate liquidity and a decent balance sheet are expected to support second-quarter 2016 results.

HOST HOTEL&RSRT Price and EPS Surprise

HOST HOTEL&RSRT Price and EPS Surprise | HOST HOTEL&RSRT Quote

Stocks to Consider

Here are a few stocks in the real estate investment trust sector that you may want to consider, as our model shows that they have the right combination of elements to post a positive surprise this quarter:

Sun Communities Inc. SUI has an Earnings ESP of +2.44% and a Zacks Rank #2. The company will report results on Aug 2.

Regency Centers Corporation REG has an Earnings ESP of +1.25% and a Zacks Rank #3. The company will release results on Aug 2.

National Health Investors Inc. NHI has an Earnings ESP of +0.83% and a Zacks Rank #2. The company will report results on Aug 5.

Note: FFO, a widely used metric to gauge the performance of REITs, is obtained after adding depreciation and amortization and other non-cash expenses to net income. All earnings per share numbers presented in this write up represent FFO per share.

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 >>

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

REGENCY CTRS CP (REG): Free Stock Analysis Report

SUN CMNTYS INC (SUI): Free Stock Analysis Report

HOST HOTEL&RSRT (HST): Free Stock Analysis Report

NATL HEALTH INV (NHI): Free Stock Analysis Report

To read this article on Zacks.com click here.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

In This Story

NHI SUI HST REG

Other Topics

Earnings Stocks