Park Hotels & Resorts stock rallies after earnings outlook raised given ‘robust’ leisure demand

Shares of Park Hotels & Resorts Inc. jumped 3.3% in premarket trading Monday, after the lodging real estate investment trust (REIT) raised its second-quarter earnings outlook, as “robust” leisure demand has led to increasing occupancy rates. The company lifted it guidance ranges for earnings per share to 13 cents to 22 cents from 5 cents to 14 cents and for adjusted funds from operations to 47 cents to 56 cents from 40 cents to 49 cents, which compares with the FactSet FFO consensus of 44 cents. The outlook for revenue per available room (RevPAR) was raised to $169 million to $173 million from $160 million to $164 million. Occupancy for the company’s 46 hotels is expected to increase to 76.3% in June from 67.9% in May. “Leisure demand remains robust in our Hawaii, Florida and Puerto Rico markets, while business transient and group demand trends continue to accelerate across our urban portfolio, with the pace of improvement expected to continue over the balance of the year,” said Chief Executive Thomas Baltimore. The company said it cannot provide a full-year financial outlook given uncertainties related to the global economy as it recovers from the COVID-19 pandemic. The stock has slipped 2.3% year to date through Friday while the S&P 500 has dropped 13.8%.

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