Host Hotels Gears Up to Report Q1 Earnings: Key Factors to Consider

Host Hotels & Resorts, Inc. HST is scheduled to release first-quarter 2025 earnings results on April 30, after market close. While the company’s quarterly results are likely to display a year-over-year rise in revenues, adjusted funds from operations (AFFO) per share might display a decline.

In the previous quarter, this Bethesda, MD-based lodging real estate investment trust (REIT) reported an AFFO per share of 44 cents, which surpassed the Zacks Consensus Estimate of 40 cents. Results reflected a year-over-year rise in revenues.

Over the trailing four quarters, Host Hotels’ AFFO per share surpassed estimates on three occasions and met in the remaining period, the average surprise being 5.73%. The graph below depicts this surprise history:

Host Hotels & Resorts, Inc. Price and EPS Surprise

Host Hotels & Resorts, Inc. price-eps-surprise | Host Hotels & Resorts, Inc. Quote

Factors to Consider Ahead of HST’s Upcoming Results

Host Hotels enjoys a portfolio of luxury and upper-scale hotels across the top U.S. Markets and the Sunbelt region. These properties are strategically located in central business districts of major cities near airports and resort/conference destinations, which drives demand.

The continuous improvement in group business has aided hotel revenue per available room (RevPAR) growth over the past few quarters. This trend is likely to have continued in the first quarter. The company expects RevPAR to grow in mid-single digits in the first quarter of 2025.

Host Hotels’ strategic capital allocations are likely to have improved portfolio quality and strengthened its position in the United States, where it has a greater scale and competitive advantage. This is likely to have given it an edge and drive margin expansion.

However, high interest expenses are likely to have been a spoilsport for HST during the to-be-reported quarter.

HST’s Q1 Estimations

The Zacks Consensus Estimate for HST’s quarterly revenues is presently pegged at $1.54 billion, implying growth of 4.7% from the prior-year period’s reported figure.

The Zacks Consensus Estimate for quarterly RevPAR is pinned at $219.2, indicating an increase from $215.4 reported in the year-ago quarter.

The consensus mark for the average occupancy rate in the first quarter is pegged at 69.1%, implying an increase from the prior-year quarter’s reported figure of 68.4%.

However, we expect first-quarter 2025 interest expenses to have risen 20.1% year over year.

The company’s activities during the to-be-reported quarter were inadequate to garner analysts’ confidence. The Zacks Consensus Estimate for AFFO per share has revised a cent downward to 55 cents in the past month. The figure implies an 8.3% fall from the year-ago reported number.

What Our Quantitative Model Predicts

Our proven model predicts a likely surprise in terms of AFFO per share for Host Hotels this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an AFFO beat, which is the case here.

Host Hotels currently has an Earnings ESP of +2.26% and carries a Zacks Rank of 3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks That Warrant a Look

Here are two other stocks from the broader REIT sector — Welltower WELL and American Tower AMT — that you may want to consider, as our model shows that these, too, have the right combination of elements to report a surprise this quarter.

Welltower is slated to report quarterly numbers on April 28. WELL has an Earnings ESP of +1.69% and carries a Zacks Rank of 2 presently. You can see the complete list of today’s Zacks #1 Rank stocks here.

AMT, scheduled to report quarterly numbers on April 29, has an Earnings ESP of +0.27% and a Zacks Rank of 3. (See the Zacks Earnings Calendar to stay ahead of market-making news.)

Note: Anything related to earnings presented in this write-up represents funds from operations (FFO), a widely used metric to gauge the performance of REITs.

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

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research