With the second-quarter earnings season underway, the early results are drawing investor interest as companies report strong profits. Instead of buying stocks that have already rallied on solid results, it may make more sense to focus on companies that still have room to surprise positively. Earnings beat often serve as catalysts, boosting sentiment and pushing shares higher.
This is likely to be reflected in the earnings releases of Host Hotels & Resorts HST, Realty Income O and Simon Property Group SPG.
REITs play a vital role in both the physical and digital sides of the economy and often show resilience even in challenging markets. Taking a closer look at the sector’s fundamentals can help investors identify areas of steady performance and long-term growth potential. Here’s a look at where the industry’s strengths lie and how it could still present value amid broader market uncertainty.
The hotel industry, in particular, demonstrated resilient growth in the second quarter of 2026. According to CBRE data, overall hotel occupancy increased 0.8% year over year as demand growth of 1.7% surpassed the 0.4% rise in supply during the quarter. Revenue per available room (RevPAR) climbed 5.7% year over year, bolstered by a 4.4% increase in the average daily rate (ADR), with real (inflation-adjusted) RevPAR growth settling at 1.8% after accounting for a 3.8% inflation rate.
For the retail industry, Cushman & Wakefield’s report shows that net absorption reached 708,000 square feet in the second quarter of 2026. National vacancy remained broadly stable at 6%, up only three basis points sequentially, while remaining below the historical average of 7.4%. Limited construction continued to support market fundamentals, with just 2.3 million square feet delivered during the quarter. Asking rents increased 2.2% year over year to $25.65 per square foot, supported by tight availability and muted new supply.
The Zacks Methodology
Picking the right stock could be difficult unless one knows the proper method. To make the task simple, we rely on the Zacks methodology, combining a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) and a positive Earnings ESP. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Our proprietary methodology, Earnings ESP, shows the percentage difference between the Most Accurate Estimate and the Zacks Consensus Estimate. Research shows that stocks with a favorable Zacks Rank and a positive Earnings ESP have as high as a 70% chance of delivering a positive earnings surprise.
Here are three REITs that have the right combination of elements to deliver positive surprises this earnings season.
Host Hotels & Resorts currently has an Earnings ESP of +1.48% and carries a Zacks Rank #2. Over the trailing four quarters, the company’s adjusted funds from operations (AFFO) per share outpaced the Zacks Consensus Estimate on all occasions, with the average beat being 8.66%. You can see the complete list of today’s Zacks #1 Rank stocks here.
Host Hotels is likely to have benefited from its portfolio of luxury and upper-scale hotels across the top U.S. markets and the Sunbelt region. The improvement in group and transient demand, including leisure and resort demand, is expected to have supported its hotel RevPAR growth in the to-be-reported quarter. The company’s strategic capital allocations are likely to have improved portfolio quality and strengthened its position in key U.S. markets, where it has a greater scale and competitive advantage. This is likely to have given it an edge and driven margin expansion. However, high interest expenses are likely to have been a spoilsport for HST during the to-be-reported quarter.
Host Hotels is scheduled to release its second-quarter earnings on Aug. 5, after market close.
The Zacks Consensus Estimate for quarterly revenues is pegged at $1.62 billion, which suggests a 2.2% increase from the year-ago quarter’s reported figure. The consensus mark for second-quarter 2026 AFFO per share is pegged at 62 cents, implying a 6.9% increase year over year.
Realty Income currently has an Earnings ESP of +0.92% and carries a Zacks Rank of 2. Over the trailing four quarters, the company’s AFFO per share surpassed the Zacks Consensus Estimate on two occasions, met once and missed another, the average beat being 0.68%.
Realty Income is likely to have delivered stable operating performance in the second quarter, supported by its diversified net lease portfolio. The company’s sustained occupancy and resilient tenant demand are likely to have supported earnings stability. Its disciplined acquisition strategy and emphasis on high-performing assets are likely to have underpinned portfolio strength and operational consistency during the to-be-reported period. On the balance sheet side, the company is expected to have experienced a continued focus on liquidity, funding costs and leverage control.
Realty Income is slated to report second-quarter 2026 results on Aug. 5, after market close.
The Zacks Consensus Estimate for quarterly revenues is presently pegged at $1.54 billion, which indicates an increase of 8.98% year over year. The consensus mark for the quarterly AFFO per share is pegged at $1.09, which calls for 3.81% year-over-year growth.
Simon Property Group has an Earnings ESP of +0.39% and carries a Zacks Rank #3 at present. Over the trailing four quarters, SPG’s FFO per share surpassed the Zacks Consensus Estimate in each quarter, with the average beat being 2.88%.
Simon Property Group’s second-quarter 2026 results are expected to show steady operating momentum, supported by healthy demand across its high-quality retail portfolio. The company is likely to have benefited from strong leasing activity. Occupancy is also expected to have remained firm, backed by demand from new tenants. However, its second-quarter performance may have been pressured by higher interest expenses and tariff-related stress on tenants.
Simon Property is scheduled to report its quarterly figures on Aug. 10, after market close.
The Zacks Consensus Estimate for second-quarter total revenues is pegged at $1.71 billion, indicating a 14.37% increase year over year. The consensus mark for the quarterly FFO per share stands at $3.18, suggesting a 4.26% increase year over year.
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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Host Hotels & Resorts, Inc. (HST): Free Stock Analysis Report
Simon Property Group, Inc. (SPG): Free Stock Analysis Report
Realty Income Corporation (O): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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