Latest news with #MarketCatalysts
Yahoo
14 hours ago
- Business
- Yahoo
Hilton's upbeat Q2 earnings: Why this analyst is still Neutral
Hilton (HLT) posted higher profit and revenue in the second quarter and raised its full-year outlook, but softer net income guidance and weaker occupancy are dragging on investor sentiment. Chad Beynon, Macquarie Group gaming, lodging & theatres analyst, joins Market Catalysts to explain why Hilton's upscale mix is a key factor behind his Neutral rating on the stock. To watch more expert insights and analysis on the latest market action, check out more Market Catalysts here. Let's continue this travel conversation because Hilton is posting higher profit and revenue in the second quarter. It also raised its earnings outlook for the year. Still, the hotel operator's revenue per available room fell half a percent due to occupancy decline. Joining me now, Chad Beynon, Macquarie Group, Gaming, lodging, and theaters analyst. It's good to see you. So, um, as we are looking at, uh, these numbers, it looks like the company did trim its net income forecast a little bit. Um, although some of its metrics look good, what's your read on the quarter? Yeah, sure. Julie, thanks for having me. Uh, second quarter came in slightly better than expected. I think some of that was timing around termination fees and just kind of how, um, the holidays impacted some leisure versus, uh, business travel. Um, their third quarter guidance came in a little below expectations and where consensus was. So positive on Q2, negative on Q3, and then for the year, they kind of, uh, stood pat in terms of how they were thinking about the year. I would say the tone was slightly more positive, particularly, um, calling for more of a business travel recovery, uh, in the back half of the year. And then as it relates to the leisure traveler, as your last guest talked about, um, I think things are fine. I think consumers continue to prioritize experiences and we saw that, uh, this summer, uh, effects could be a slight positive because, uh, going to Europe or leaving the country is a little bit more expensive this year. Um, so as we've seen, uh, you know, people might stay closer home and vacation, uh, with drive to or shorter haul flights. Well, and I was talking earlier too about what we heard from the airlines, which seemed to be that sort of full service premium customers were holding up better. Are we seeing that play out in the lodging world as well? Absolutely. Uh, when we analyze the chain scale, uh, trends, um, revenue and occupancy in the United States, um, those higher-end full-service brands continue to outperform. I think that's been the case for almost a year now. So it certainly calls the question what's going on with that lower-end economy chain scale focused, uh, uh, brand or portfolio. Uh, so we continue to like those that lean a little bit more upscale, as we know the consumer is kind of fickle here. Um, you know, people are enjoying experiences. But the last two or three years, I think people extended their budgets in every, uh, age bracket. So the, uh, you know, people in that luxurious, uh, level were spending a little bit more. But also people in kind of the lower chain scales were, were spending more. So that's kind of what we're keeping an eye on. And our ratings kind of reflect a view towards some of the higher-end, uh, brands. Well, I was going to ask, I know you got a neutral rating, right? On Hilton? Um, is that why? Because they, you know, just because of their sort of hotel mix and who who their who their audience is? Yeah, I'd say fundamentally, I think net unit growth has probably been better than expected, uh, during the past couple years. The Rev par, uh, which is a key focus for analysts, um, has been roughly in line. I think one of the reasons why lodging stocks outperformed in 23 and 24, uh, compared to, uh, the S&P, it's really the business model, right? The franchisor business model continues, um, to receive praise from investors. And it was about a 10% outperformance for the group in 23 and in 24. So we're looking at these stocks trading, you know, around 30 times earnings, which is where we see high growth stocks, uh, in the market trading. So they're clearly in that category. And that's kind of been why we've maintained our neutral rating. It's certainly above historical trading levels and we are waiting for a little bit of a broader recovery, uh, to become more constructive on Hilton. Related Videos US equities lead 2025 ETF flows: A closer look at global trends Hasbro Q2 beat, MARA to raise $850M, Otis issues weak guidance GE Vernova, Thermo Fisher, Enphase Energy: Trending Tickers Japanese auto stocks are surging on Trump's tariff deal Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
17 hours ago
- Business
- Yahoo
June's existing-home sales fell 2.7% & hit record-high price
Existing-home sales fell 2.7% in June, which was more than economists expected, according to fresh data from the National Association of Realtors (NAR). Yahoo Finance Senior Reporter Claire Boston joins Market Catalysts with Julie Hyman to discuss the details. To watch more expert insights and analysis on the latest market action, check out more Market Catalysts here. We're looking at some new data, just out this morning. It's on existing home sales falling more than expected in June. Here with the numbers and some perspective, we've got senior housing reporter, Claire Boston. So, I'm seeing a decline 2.7% in June, Claire, uh which indeed is worse than estimated. Yeah, Julie. So we were expecting, um, a seasonally adjusted annual rate of about 4 million homes sold this year. And uh, as of June, we are at 3.93. So a good bit worse than expected. That being said, you know, not super unexpected, just given what we know about the market. Affordability is super constrained right now, and uh, mortgage rates are still high, and um, you know, I think what we're seeing is that this spring home buying season was pretty much a bust. Existing home sales, they cover a period where, maybe a month or two earlier, things went under contract. So that's like April and May. This is really prime time. We're seeing disappointing numbers. And uh, you know, I'm not sure that a lot is going to change in this market until mortgage rates and potentially prices go lower. Um, it it's also interesting. I know that under supply has been such a big issue, both in the existing and in the new home sales market. And I can't help noticing here total housing inventory actually fell uh compared with May. It is up year over year, but I know that that's something that is sort of a persistent issue here. Right. We are still undersupplied in this country with housing. And I think when you're seeing that inventory fall, what's happening here is that recognition from sellers that this is not a great spring to sell. You know, we are seeing de-listings on the rise. You know, just data saying that, um, people are taking homes off the market, that just makes things even harder for buyers in this environment. You know, especially we talk a lot about the Northeast and the Midwest as being parts of the country where inventory is really, really constrained. And, uh, you know, again, really no relief there right now. And then there are prices, right? Because affordability is yet another piece of this whole thing. Um, the median existing home price, $435,300, which is up 2% year over year, and they say a record high for June. So, no relief there either. Absolutely not. So yeah, that 435,000 figure is actually an all-time record high. And, um, you know, again, I think that's why people are on the sidelines. You know, you have record high prices, you have record high, not record high mortgage rates, but you know, higher than we've seen, you know, historically for a long time. And as a result, you know, those buyers are really constrained. Maybe they want to get into this market, but they really can't. And, um, you know, we are building homes, uh, but not everywhere. Uh, there are places that, you know, you really don't have space to build. And, um, there are places where we're oversupplied with housing. Um, and so, you know, what we're seeing here is just the fact that, you know, nationally we still need more homes to be built. And, um, you know, until we have, you know, that kind of supply and demand balance, we're going to see home prices keep rising, probably. Claire, thank you so much for your perspective. Appreciate it. Thank you. Related Videos Tesla Q2 earnings: 3 things investors will be looking for Meme stock rally heats up: Kohl's stock soars Trump reiterates Powell criticism, Bessent calls for rate cuts Markets are strong, but a 'trigger' could create volatility soon Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
17 hours ago
- Business
- Yahoo
Trump reiterates Powell criticism, Bessent calls for rate cuts
President Trump has reiterated his criticism of Federal Reserve Chairman Jerome Powell at a White House event. Market Catalysts host Julie Hyman breaks down the details. To watch more expert insights and analysis on the latest market action, check out more Market Catalysts here. You're looking at a live shot from the Oval Office. President Trump holding a bilateral press conference while hosting the president of the Philippines, Ferdinand Marcos Jr. President Trump reiterating his criticism of Powell in a Q&A with the press, but he did stop short of demanding that the Fed chair step down immediately, saying, quote, he's got to be out in eight months. He also accused Powell of keeping rates high, he says for political reasons here. He did talk about the building costs at the Federal Reserve for the renovation that has been the Trump administration's reason or excuse for criticizing Powell recently here. Also, Treasury Secretary Scott Besin, chiming in with his latest criticism of the Fed, that he says that the organization has mission creep, which is something that has come up over the past couple of days, and he says that the Fed should be cutting rates now. So basically just a reiteration of some of the recent criticisms from the White House towards the Federal Reserve. We'll be continuing to monitor it here. We had a fascinating conversation earlier in the show with John Hilsenrath, formerly of the Wall Street Journal, as well as Greg Ip, currently the chief economics correspondent at that organization, and both of them saying that the Fed's independence has already been compromised to some extent by the actions of the White House, and this is something definitely that market participants are talking a lot about. We'll continue again to monitor this press conference for any further commentary here. Related Videos June's existing-home sales fell 2.7% & hit record-high price Firing Fed Chair Jerome Powell could spark market chaos Faulkender on Powell's Future, China Trade, Russia, Iran Trump Sets Tariff on Philippines at 19% Sign in to access your portfolio
Yahoo
a day ago
- Business
- Yahoo
Domino's Q2 revenue beat: Why this analyst still isn't bullish
Bernstein senior analyst for US restaurants Danilo Gargiulo joins Market Catalysts with Julie Hyman to discuss Domino's (DPZ) second quarter earnings results, where the company beat revenue estimates. To watch more expert insights and analysis on the latest market action, check out more Market Catalysts here. Domino's giving up on some earlier gains after it topped second quarter revenue estimates boosted by strong same store sales growth. Joining me now Danilo Garzillo, Bernstein senior analyst for US restaurants. Danilo, it's good to see you. You've got a neutral rating on the stock, but you did, um, like most of your peers, you were impressed by these results. Was there anything on the call or in the results that you think could be responsible for the pullback that we're now seeing in the shares? I will actually point something else. Maybe during the call, there were a couple of comments that I think were incremental, um, that the CEO Russell was trying to explain, not only the strength of the fundamentals of Domino's potentially during into 2026 and the international markets, um, you know, having some sort of recovery overall. I think there were a couple of comments that were interesting on the potential menu platform expansion that Domino's could be having in 2026 or beyond that could be driving the stock further. But I think to your question directly on the potential pullback that we might have seen, I think the uncertainty on international markets regarding the number of units, um, given the situation that is unfolding with one of their master franchisees could be the potential cause for this deceleration. Gotcha. Interesting. So the shares are now down about 2%, but to your point on the longer term, um, how much was sort of menu innovation? I mean, if you're looking out further and seeing more menu expansion, how much was menu innovation a driver for traffic and sales in the quarter? Yeah. I think it was a significant component of their acceleration and it has been a significant component of Domino's acceleration. If you look at also the past 10 years, right, they've been gaining market share quite consistently over the past 10 years where others have been closing their stores, Domino's has been able to open their stores. And part of the reasons why Domino's has been able to boost it is because the franchisee economics has been relatively solid, um, given that the menu innovation has also attracted more and more new consumers. So specifically this quarter, there's been a boost in sales derived by the launch of the parmesan stuffed crust pizza last quarter that should be helping for at least the remaining of 2025 and into 2026 the sales to remain sustained. I'm also curious, um, you know, the company also talked on the call about the national rollout on DoorDash and that that is a potential driver here. How much do you think that's going to help traffic? Yeah, I would say so far it has been relatively minimum impact into the 2Q number, simply because the timing of the partnership was towards the end of the quarter. But I think we have seen also with Uber Eats that exit rate of end of last year it was about 3% as a total sales that Domino's was generating in the US. And so I would think that DoorDash having twice as much, you know, twice as much market share compared to Uber Eats will be a meaningful contributor to Domino's sales going forward. The only question is going to be how much of the overlap might be we seeing from users who are both Uber Eats and DoorDash users. So how much of that could be potentially a drawback into the overall upside optionality that this platform will provide to Domino's. But definitely there is a set of consumers who don't have their Domino's apps and by heading just an aggregator on their mobile phone are going to be having access to Domino's pizza, but as before they couldn't. Um, Danilo, what about the cost side of the equation? I saw one of your, um, peers, another analyst flagged that there was some margin compression. What accounted for that, and is that going to continue to be an issue? Yeah, I would say there were two main components. On the food side, I think we were not particularly worried because management had already called out the potential fluctuations on on the food. Um, the part that really was a surprise for us and I think for everybody was some one-off impact that some insurance charges really had on the on the second quarter earning. This should be like a one-off, so I'm not entirely worried. Now, clearly, as we think about the value intensity in the pizza category, and if we think about some of the mix shift that we might be seeing because the carry out component of Domino's is growing, then clearly there could be some potential margin compression over time, like marginal margin compression over time that, you know, one should be potentially expecting for Domino's, given that the vast majority of the productivity gains has already been achieved by Domino's. And Danilo, as I mentioned, you've got a market perform, a neutral equivalent on this stock. Um, I'm curious why, especially given these results, what's still sort of holding you back from being more bullish? Yeah, I think most investors will want to see a couple of things. Number one, either a better entry point, right? The stock already trading mostly in line, if not a little bit above their five-year median in terms of valuation that clearly calls out for sustainable same-store sales growth and acceleration in units. And I think obviously you would want to see some elements of that sustaining over time. And then the second part that investors have been a little bit more concerned about is how much of these 2025 out performance in the first quarter, which by the way is going to be accelerating in the second quarter as well, because of the timing of some of these initiatives, how much of that is going to be retained in 2026 when you're going to start lapping the launch of the stuffed crust pizza, the launch of the DoorDash partnership. So any incremental news, like new menu items, like the one that Russell, the CEO, was mentioning in the call, like, you know, the potential fried chicken addition into their menu, that could be a clear catalyst for the stock reacceleration and sustainability of an even a higher multiple versus their versus their historical median. Danilo, when you're looking ahead to some of those other innovations, maybe on the menu that we're waiting for, any requests, anything that you think that they should be developing? Look, I think the Wingstop example clearly is clear. Um, the having fried chicken has been working thoroughly in many parts of the world. I don't know if the version that Domino's has necessarily on their menu could be as satisfactory to the vast majority of consumers as of now. So as Domino's is exploring the, you know, the void areas into their menu, and now they have the capacity to the stores to potentially adding some fryers, I would think that could be like a potential venue for them to be entering a little bit more aggressively. Other than that, there is always opportunity to be a little bit more streamlined in some SKUs that don't have the highest level of velocity, but I would say fried chicken seems to be the place where everybody's trying to crowd the market right now, and it will be like a safe bet.
Yahoo
3 days ago
- Business
- Yahoo
Trump's tariffs: Lutnick reaffirms Aug 1 'hard deadline'
Yahoo Finance Washington Correspondent Ben Werschkul joins Market Catalysts with Julie Hyman to discuss the August 1 tariff deadline, which US Commerce Secretary Howard Lutnick recently reiterated as a "hard deadline." He also discusses Wall Street Journal reports that the EU is preparing for a trade war with retaliatory measures. To watch more expert insights and analysis on the latest market action, check out more Market Catalysts here. Commerce Secretary Howard Lutnick, he said on CBS news over the weekend that it is a hard deadline for when new tariff rates will set in, but that countries can still negotiate after that date. So, where are we with some of these trade deals? Joining me now with the latest Yahoo Finance Washington Correspondent, Ben Worshler. And the one the negotiations with the EU seem to be most in focus right now, right? For sure, yeah. Europe Europe is definitely most in focus this morning amongst these wide range of deals. And what we're getting on the Europe side here is sort of a picture of what a no-deal scenario looks like. We got there's a bunch of reports from Brussels, um, in in recent hours of of what you countermeasures could be if no deal is reached by by August 1st. Um, the big ones would be retaliatory tariffs on a wide range of US goods from steel to bourbon to a whole bunch of goods. A big escalation would be what what are called, um, anti-coercion measures that the the European Union has, which could allow them to simply restrict trade. That would obviously be a massive escalation here in terms of this standoff between the US and the EU. But it does come. I should note as both sides say that they are looking they are they're still negotiating. They're still confident that they're and in some cases confident that there could be a deal, um, on the earlier side. Um, Lutnick also said on CBS over the weekend, there's plenty of room for a deal. So, and and that he was talking to them as recently as as as Sunday. So there's still lots of back and forth there, but it's kind of a get ready for the worst-case scenario if that if that comes. One other nuance I wanted to, I think is important for investors though, and you saw it in that Lutnick quote, is they're saying the White House message is evolving a little bit to say that there is a firm deadline for tariff rates on August 1st, but not necessarily tariff trade deals. Um, Lutnick had the comments, Best Secretary of the Treasury, Scott Best this morning on CNBC had a similar line about how they're not they're they're they're they're not looking to rush deals. They're waiting for high-quality deals is how he put it, which which could give us a little wiggle room on this August 1st deadline for deals, but according to the White House, not necessarily tariffs. Another front in this that I think falls in the similar theme is India, which Indian negotiators were here in Washington just this weekend for a fifth round of talks. They came away according to Indian media confident in what they describe as a mini deal, but with a key caveat here, uh, the the any announcement is not likely to come until September or October. So the emerging question is kind of what happens in August and September as these as these deals aren't necessarily done, but but but Trump has promised rates will go into place. Yeah, the message seems to be that they're not pushing it back again. Is that the way to read it? Yeah, I think I think on all these fronts. So it's the overall dynamic here, I think, is especially true with Europe is that the European is that Trump team keeps asking for additional concessions. We we had reports, um, a few weeks ago of there seemed to be a consensus around a 10% tariff on the European Union. That that is clearly less likely now. Trump and his team are floating things like a 15 or 20% rate, and his letter last week was a 30% rate. So there's definitely a a lot of pushback on both sides on all these fronts with with Trump and his team in their own accounting pushing for the the best deal possible for certainly. And it could go right up to this August 1st deadline or even beyond.
