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What's in the Cards for Ashford Hospitality's (AHT) Q2 Earnings?

Ashford Hospitality Trust, Inc. AHT is scheduled to report second-quarter 2021 results on Jul 28, after the bell. The company’s results are anticipated to reflect year-over-year increase in revenues.

In the last reported quarter, this Dallas, TX-based lodging real estate investment trust (REIT) reported negative adjusted FFO per share of 30 cents, beating the Zacks Consensus Estimate. The company’s portfolio generated positive Hotel EBITDA in the first quarter.

Over the trailing four quarters, the company surpassed estimates on two occasions for as many misses, the average negative surprise being 2.14%. This is depicted in the graph below:

Ashford Hospitality Trust Inc Price and EPS Surprise

Ashford Hospitality Trust Inc Price and EPS Surprise
Ashford Hospitality Trust Inc Price and EPS Surprise

Ashford Hospitality Trust Inc price-eps-surprise | Ashford Hospitality Trust Inc Quote

Let’s see how things have shaped up prior to this announcement.

Factors to Consider

The vaccine roll-out and the revival of leisure travel demand have led to the recovery of hotel occupancy. Amid this, hotel REITs, which were affected significantly in the early stages of the coronavirus pandemic, have seen a recovery in the recent months. Moreover, the relaxation of social-distancing norms and the reopening of cities have enabled hotel operators to restart operations.

According to the company’s preliminary results that were announced recently, the company achieved positive Hotel EBITDA for the second consecutive quarter. Management attributed strong leisure and transient demand across its portfolio for this improvement.

The preliminary estimated range of Adjusted EBITDAre is $30.3-$32.3 million, while adjusted FFO per share is expected to be in the range of $(0.3) million to $1.7 million for the second quarter.

The Zacks Consensus Estimate for second-quarter revenues is currently pinned at $169.2 million, suggesting impressive growth from the $43.07 million reported in the year-ago period.

Ashford Hospitality’s activities during the soon-to-be-reported quarter were inadequate to gain analysts’ confidence. The Zacks Consensus Estimate for the quarterly FFO per share has remained unrevised at a negative $2.15 in a month’s time.

Here is what our quantitative model predicts:

Our proven model does not conclusively predict a positive surprise in terms of FFO per share for Ashford Hospitality this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of a FFO beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Ashford Hospitality currently carries a Zacks Rank #3 (Hold) and has an Earnings ESP of 0.00%.

Stocks That Warrant a Look

Here are a few stocks in the REIT sector that you may want to consider, as our model shows that these have the right combination of elements to report a positive surprise this quarter:

Duke Realty Corp. DRE, slated to release second-quarter earnings on Jul 28, has an Earnings ESP of +0.47% and carries a Zacks Rank of 2, at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Digital Realty Trust, Inc. DLR, scheduled to report quarterly numbers on Jul 29, currently has an Earnings ESP of +0.63% and carries a Zacks Rank of 3.

Public Storage PSA, slated to announce second-quarter results on Aug 3, currently has an Earnings ESP of +0.69% and carries a Zacks Rank of 2.

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.

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Public Storage (PSA) : Free Stock Analysis Report

Duke Realty Corporation (DRE) : Free Stock Analysis Report

Digital Realty Trust, Inc. (DLR) : Free Stock Analysis Report

Ashford Hospitality Trust Inc (AHT) : Free Stock Analysis Report

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