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Hilton Worldwide (NYSE:HLT) Q3 2020 Earnings Prep

in EARNINGS/INVESTING IDEAS by

Hilton Worldwide Holdings Inc. (NYSE:HLT) is scheduled to report Q3 earnings results before markets open for trading on November 4, 2020.

The company is expected to report earnings of -$0.04/share on revenue of $959.9 million. The consensus earnings per share (EPS) of -$0.04/share is based on a poll of 22 analysts and represents a decline in eps of −103.5% over the same quarter last year, when the company reported earnings of $1.05/share.

The revenue forecast of $959.9 million based on a poll of 10 analysts implies a year-over-year (YoY) decline in revenue of −59.9%. Last year the company reported $2.395 billion in revenue for the quarter.

Expected to report EPS of -$0.04/share for Q3, 2020
Metric Expected Prior Year YoY Change
Revenue $959.90 $2,395.00 −59.9%
EPS -$0.04 $1.05 −103.5%

Earnings Call Trends

Historically, management has exceeded analyst expectations 7 out of the last 8 tracked quarters, and missed expectations 1 quarter.

What are your expectations from Hilton Worldwide Holdings Inc. for earnings this quarter? Let us know in the comments!

Analyst Expected vs. Reported EPS
Quarter Expected Reported Surprise Result
Q2, 2020 -$0.30 -$0.61 -103.5% Missed
Q1, 2020 $0.51 $0.74 45.5% Beat
Q4, 2019 $0.96 $1 4.0% Beat
Q3, 2019 $1.02 $1.05 2.8% Beat
Q2, 2019 $1.02 $1.06 4.0% Beat
Q1, 2019 $0.76 $0.80 5.1% Beat
Q4, 2018 $0.69 $0.79 14.5% Beat
Q3, 2018 $0.75 $0.77 2.1% Beat

In the following table, we summarize the company’s stock price movements after earnings releases. The “Price Day Prior” column shows the closing stock price on the day before the earnings report, and the “Price Next Day” column shows the stock price at the end of the trading day after the earnings report. After the last earnings report for the period ending June 30, 2020, the stock price reacted by increasing 4.6%.

Stock Price Performance After Earnings
Report Date Price Day Prior Price Next Day Change % Result
August 6, 2020 $80 $83.70 4.6% Increase
May 7, 2020 $70.79 $72.19 2.0% Increase
February 11, 2020 $111.37 $113.70 2.1% Increase
October 23, 2019 $90.73 $96.91 6.8% Increase

The other question to consider is one of earnings manipulation. There is a lot of pressure on management each quarter to deliver on earnings expectations. The Beneish M-Score is a statistical model that provides some insight into whether the company might be manipulating earnings. With a Beneish M-Score of −3.30, the model suggests that the company is not likely to be an earnings manipulator. A value of −3.30 implies a 0.0% chance of earnings manipulation.

Fundamentals And Technical Analysis

Hilton Worldwide Holdings Inc. is currently trading at $84.97/share, down −3.1% for the day. The company is trading at approximately 73.8% of its 52-week high of $115.48/share. The company’s stock price is up 1.5% since the last earnings report and down −4.5% over the previous week. The company’s 14 Day Relative Price Index (RSI) of 43.55 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.


NYSE:HLT Stock Price Chart
Source: Finbox

The current share price implies a price-to-earnings (P/E) multiple of 461.80 and a forward P/E multiple of 611.30.

Hilton Worldwide Holdings Inc.’s current share price also implies a price-to-book (P/B) multiple of −18.13. The following table summarizes some other key fundamental ratios:

Data as of October 28, 2020
Metric Value
Last Reported Fiscal Period Key FY2020.Q2
Period End Date June 30, 2020
Stock Price (Current) $84.97
P/E Ratio 461.8x
P/E Ratio (Fwd) 611.3x
PEG Ratio −5.1
Total Debt / Total Capital 32.4%
Levered Free Cash Flow $1.615 billion
EV / EBITDA 29.9x

Finbox

Hilton Worldwide Holdings Inc. is a large-cap stock with a market capitalization of $24.312 billion and a total enterprise value of $32.482 billion. The company operates in the Consumer Discretionary sector and the Hotels, Restaurants & Leisure industry.

Hilton Worldwide Holdings Inc., a hospitality company, owns, leases, manages, develops, and franchises hotels and resorts. It operates through two segments, Management and Franchise, and Ownership. The company engages in the hotel management and licensing of its brands. It operates hotels under the Waldorf Astoria Hotels & Resorts, LXR Hotels & Resorts, Conrad Hotels & Resorts, Canopy by Hilton, Signia by Hilton, Hilton Hotels & Resorts, Curio Collection by Hilton, DoubleTree by Hilton, Tapestry Collection by Hilton, Embassy Suites by Hilton, Motto by Hilton, Hilton Garden Inn, Hampton by Hilton, Tru by Hilton, Homewood Suites by Hilton, Home2 Suites by Hilton, Hilton Grand Vacations, and Tempo by Hilton brands. The company operates in North America, South America, and Central America, including various Caribbean nations; Europe, the Middle East, and Africa; and the Asia Pacific. As of February 21, 2020, the company had approximately 6,100 properties with approximately 971,000 rooms in 119 countries and territories. Hilton Worldwide Holdings Inc. was founded in 1919 and is headquartered in McLean, Virginia.

Expertise: financial modeling, mergers & acquisitions. Andy is also a founder at finbox.io, where he’s focused on building tools that make it faster and easier for investors to do investment research. Andy’s background is in investment banking where he led the analysis on over 50 board advisory engagements involving mergers and acquisitions, fairness opinions and solvency opinions. Some of his board advisory highlights: - Sears Holdings Corp.’s $620 mm spin-off via rights offering of Sears Outlet, Hometown Stores and Sears Hardware Stores. - Cerberus Capital Management’s $3.3 bn acquisition of SUPERVALU Inc.’s New Albertsons, Inc. assets. Andy can be reached at andy@finbox.io or at +1 (516) 778-6257.

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