Park Hotels & Resorts (PK) FFO and Q3 revenue beat estimates

Park Hotels & Resorts (PK) exited with quarterly funds from operations (FFO) of $0.42 per share, beating Zacks consensus estimate of $0.40 per share. That compares to an FFO of $0.02 per share a year ago. These figures are adjusted for non-recurring items.

This quarterly report represents a surprise FFO of 5%. A quarter ago, this company was expected to post an FFO of $0.49 per share when it was actually producing an FFO of $0.61, delivering a surprise 24.49%.

In the past four quarters, the company has exceeded consensus FFO estimates three times.

Park Hotels and Resorts, which is part of the Zacks REIT and Equity Trust – Other segment, posted revenue of $662 million for the quarter ended September 2022, beating Zacks’ consensus estimate by 1.59%. That compares to revenues of $423 million a year ago. The company has exceeded consensus revenue estimates four times in the past four quarters.

The sustainability of the immediate stock price movement based on recently released numbers and future FFO expectations will primarily depend on management’s comments on the earnings call.

Shares of Park Hotels & Resorts have lost about 30.2% year-to-date against a -19.1% drop for the S&P 500.

What’s next for Park Hotels & Resorts?

While Park Hotels & Resorts has underperformed the market so far this year, the question on investors’ minds is: what’s next for the stock?

There is no easy answer to this key question, but a reliable metric that can help investors solve this problem is the company’s FFO outlook. This includes not only current FFO consensus expectations for the upcoming quarter(s), but also how those expectations have changed recently.

Empirical research shows a strong correlation between short-term stock movements and trends in estimate revisions. Investors can track these revisions on their own or rely on a proven rating tool like Zacks Rank, which has an impressive track record of harnessing the power of estimate revisions.

Before that Press release, the trend in estimates revisions for Park Hotels & Resorts: mixed. While the magnitude and direction of estimate revisions may change following the release of the company’s earnings report, the current situation translates into a No. 3 (hold) Zacks ranking for the stock. Thus, the shares should move in line with the market in the near future. You can see the full list of today’s Zacks #1 Rank (Strong Buy) stocks here.

It will be interesting to see how the estimates for the next few quarters and the current fiscal year change in the days ahead. The current FFO consensus estimate is $0.45 on $662.66 million in revenue for the upcoming quarter and $1.54 on $2.49 billion in revenue for the current fiscal year.

Investors should be aware that the outlook for the sector can also have a significant impact on stock performance. In terms of Zacks industry rankings, REITs and Equity Trust – Other are currently in the bottom 45% of Zacks more than 250 industries. Our research shows that the top 50% of industries ranked by Zacks outperform the bottom 50% by a factor of more than 2 to 1.

Sabra Healthcare (SBRA), another stock in the same sector, has not yet released its results for the quarter ended September 2022. The results are expected to be released on November 7.

This healthcare real estate investment trust is expected to post quarterly earnings of $0.38 per share in its upcoming report, which is no change from the year-ago quarter. The consensus EPS estimate for the quarter has been revised down 0.7% in the past 30 days from the current level.

Sabra Healthcare revenue is expected to be $157.48 million, up 22.5% from the prior year quarter.

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