What's in the Cards for Host Hotels (HST) in Q4 Earnings?

Host Hotels & Resorts, Inc.HST is set to report fourth-quarter 2016 results before the market opens on Feb 22.

Last quarter, this Bethesda, MD-based lodging real estate investment trust ("REIT") delivered a better-than-expected performance, reporting a positive surprise of 2.78%. Over the past four trailing quarters, the company posted surprises in three occasions, with an average beat of 5.53%.

Currently, the Zacks Consensus Estimate for fourth-quarter funds from operations ("FFO") per share is pegged at 38 cents.

Host Hotels & Resorts, Inc. Price and EPS Surprise

Host Hotels & Resorts, Inc. Price and EPS Surprise | Host Hotels & Resorts, Inc. Quote

Let's see how things are shaping up for this announcement.

Factors to Consider

Host Hotels boasts a portfolio of upscale hotels across lucrative markets in the U.S. Also, the company undertook a strategic capital-recycling program to enhance portfolio quality and fortify its position over global vibrant markets. Moreover, Host Hotels has a decent balance sheet and ample liquidity.

However, the company anticipates its revenue per available room ("RevPAR") growth to have been considerably affected amid a slowdown in business travel, the election cycle, as well as the timing of the holiday calendar. In addition, with the company repositioning its portfolio, disposition of assets and disruptions due to substantial redevelopment projects have been hurting impact of growth in comparable hotel revenues, thereby, putting pressure on top-line growth.

Further, though supply growth has been tepid in the past, it has gathered momentum in recent times. Specifically, with rising supply, lodging fundamentals are likely to remain weak in the New York and Houston market as well as in Brazil.

Earnings Whispers

Our proven model does not conclusively show that Host Hotels will beat on earnings this season. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), #2 (Buy) or #3 (Hold) for this to happen. However, that is not the case here as you will see below.

Zacks ESP: Both the Most Accurate estimate and the Zacks Consensus Estimate are currently pegged at 38 cents. Therefore, the Earnings ESP, which represents the percentage difference between the two, is 0.00%. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter .

Zacks Rank: Host Hotels' Zacks Rank #3 increases the predictive power of ESP. However, we also need to have a positive ESP to be confident of an earnings beat.

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

Stocks to Consider

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

Chesapeake Lodging Trust CHSP has an Earnings ESP of +2.17% and a Zacks Rank #2. The company will release results on Feb 22. You can see the complete list of today's Zacks #1 Rank stocks here .

Terreno Realty Corporation TRNO , likely to release earnings results around Feb 22, has an Earnings ESP of +4.00% and a Zacks Rank #3.

Hersha Hospitality Trust HT is scheduled to report earnings on Feb 22. It has an Earnings ESP of +2.04% and a Zacks Rank #3.

Note: All earnings per share numbers presented in this write up represent Funds from Operations ("FFO") per share. 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.

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Host Hotels & Resorts, Inc. (HST): Free Stock Analysis Report

Terreno Realty Corporation (TRNO): Free Stock Analysis Report

Hersha Hospitality Trust (HT): Free Stock Analysis Report

Chesapeake Lodging Trust (CHSP): Free Stock Analysis Report

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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.

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