Hilton’s Q4 earning review
Hilton Worldwide Holdings Inc. is due to report its 2020 Q4 earnings for the fiscal quarter ending December 2020 on February 17, before the US market opens. According to Zacks Investment Research, “it is expected to post quarterly earnings of $0.04 per share in its upcoming report, which represents a YoY change of -96%. Revenues are expected to be $1.06 billion, down 55.4% from the year-ago quarter.”
Even though how the actual results compare to these expectations will still be important, investors have already lowered their expectations knowing that the tourism industry could not use the advantage of new year holidays as they usually do and that the latest lockdowns will have caused further damage.
Earnings and warnings
Besides the earning reports, investors in the hospitality sector are also paying attention to the real value of stocks, especially at the current levels. For example, HLT is currently trading at $112, the same level as before the pandemic, but the question is, do they have the same business and income as a year ago?
Historically high valuations in the hospitality sector may give some potential investors pause before buying at current levels.
Daniel Kane, a portfolio manager at Artisan Partners (NYSE:APAM) who bought shares of Marriott while its stock was tumbling last March and April. (investing.com)
Most stocks in the hospitality sector are now trading based on estimates of their 2023 results, pushing their current valuations well above their long-term averages.
Robin Farley, UBS analysts. (investing.com)
In addition, the market is also encouraged by the prospect of economic recovery being able to start as soon as the end of the summer, due to vaccination progress, the continuing dovish policies of central banks, the 1.9B stimulus package of the US government that could move the market at least in the short term and many developed economies planning their reopenings.
Therefore, crisis management and keeping investors hopeful with creative ideas and a positive outlook for the next quarter could be key to overcoming this situation.
Technical review:
Technically HLT shares are trading very close to their all-time high of $115.66, which is currently the upper line of Donchian and key resistance. $81, which is 50% Fib of of the 2020 February freefall to $44 as well as Donchian low is the key support. Generally any number above this level can help prices move higher, however 50 DMA at $96 is also the first support, and negative results could move the price towards these levels as well.
Ahura Chalki
Foreign Market Analyst
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
