Hilton Worldwide Holdings Inc. HLT is slated to release second-quarter 2026 results on July 28, before the opening bell.
In the last reported quarter, the company’s earnings beat the Zacks Consensus Estimate by 2.6%. HLT’s earnings surpassed estimates in each of the trailing four quarters, with average surprise being 4.6%, as shown in the chart below.
Image Source: Zacks Investment Research
Trend in Estimate Revision
The Zacks Consensus Estimate for second-quarter earnings per share (EPS) has increased to $2.28 from $2.27 in the past 7 days. The estimated figure indicates a 3.6% increase from the year-ago EPS of $2.20. The consensus mark for revenues is pegged at $3.36 billion, indicating 7.2% year-over-year growth.
What the Zacks Model Unveils
Our proven model predicts an earnings beat for Hilton this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. This is exactly the case here.
Earnings ESP: Hilton has an Earnings ESP of +0.80%. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Zacks Rank: The company carries a Zacks Rank #3 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Factors Influencing HLT’s Q2 Performance
Hilton's second-quarter revenues are likely to have been supported by continued RevPAR growth, with management projecting system-wide RevPAR growth of 2-3% despite disruptions in the Middle East. Demand trends strengthened through late 2025, carried into the first quarter and remained favorable through April, indicating healthy booking momentum entering the quarter. Group travel is expected to have remained the strongest growth driver, complemented by resilient business and leisure transient demand.
The company's largest market, the United States, also appears to have provided a meaningful boost to revenues. Improved corporate travel, stronger midweek business demand and robust group bookings, backed by rising corporate lead volumes, are likely to have supported occupancy and room rates. At the same time, favorable economic conditions, including rising business investment, infrastructure spending and AI-related projects, might have broadened travel demand across customer segments.
Another factor likely to have contributed to the top-line growth is Hilton's ongoing network expansion. Strong net unit growth, a record development pipeline and higher conversion activity are expected to have driven additional management and franchise fee income. Continued international expansion and new hotel openings might also have helped offset the adverse impact of softer travel trends in the Middle East.
Our model predicts Management and Franchise Hotels, Owned and Leased Hotels and Other revenues to increase 13.6%, 2.8% and 13.5% year over year, respectively.
Hilton's earnings are likely to have benefited from higher management and franchise fee revenues, supported by RevPAR growth and continued unit expansion. The company's asset-light business model, operating leverage and disciplined cost structure are also expected to have supported profitability.
Hilton's second-quarter performance might have been constrained by the ongoing conflict in the Middle East, which management expected to weigh significantly on regional RevPAR due to travel disruptions. The company projected RevPAR in the Middle East and Africa to have declined sharply during the quarter, with the region likely to have the biggest impact on second-quarter results. In addition, management cautioned that the conflict might have created modest spillover effects on nearby markets, including parts of India, the Seychelles and the Maldives, while several one-time and timing-related items are also expected to have pressured second-quarter adjusted EBITDA and earnings.
Price Performance & Valuation
In the past year, the company has gained 21.5% compared with the industry’s growth of 24.1%. Other industry players like Hyatt Hotels Corporation H and Choice Hotels International, Inc. CHH have gained 27.1% and declined 18%, respectively.
Price Performance
Image Source: Zacks Investment Research
Let us assess the value HLT offers to investors at its current levels.
From the valuation point of view, the stock is trading at a premium. HLT’s forward 12-month price-to-earnings ratio stands at 32.84, higher than the industry’s ratio of 21.16.
P/E (F12M)
Image Source: Zacks Investment Research
Investment Thoughts
Hilton continues to benefit from resilient travel demand, healthy group bookings, expanding hotel openings and a capital-light business model that supports steady earnings growth, making the stock worth holding for existing investors.
However, prospective investors may be better served by waiting for the upcoming quarterly results. While the company appears well positioned for long-term growth, management has already flagged headwinds from the Middle East conflict and certain one-time factors that could weigh on near-term performance. Waiting for the earnings release would provide greater clarity on the extent of these pressures, the sustainability of demand trends and management's outlook before initiating a new position.
Zacks' Research Chief Names "Stock Most Likely to Double"
Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. Of those 5, Director of Research Sheraz Mian highlights the one stock set to climb highest.
This top pick is a little-known satellite-based communications firm. Space is projected to become a trillion dollar industry, and this company's customer base is growing fast. Analysts have forecasted a major revenue breakout in 2025. Of course, all our elite picks aren't winners but this one could far surpass earlier Zacks' Stocks Set to Double like Hims & Hers Health, which shot up +209%.
Free: See Our Top Stock And 4 Runners UpWant 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
Hilton Worldwide Holdings Inc. (HLT): Free Stock Analysis Report
Hyatt Hotels Corporation (H): Free Stock Analysis Report
Choice Hotels International, Inc. (CHH): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).