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Marriott (MAR) Down 6% Since Last Earnings Report: Can It Rebound?
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A month has gone by since the last earnings report for Marriott International (MAR - Free Report) . Shares have lost about 6% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Marriott due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Marriott Q4 Earnings Beat Estimates, Increase Y/Y
Marriott reported impressive fourth-quarter 2021 results, with earnings and revenues beating the Zacks Consensus Estimate as well as increasing on a year-over-year basis.
During the quarter, the company reported improvements in revenue per available room (RevPAR), occupancy and average daily rate (ADR) on account of solid leisure demand as well as recovery in business transient and group demand. Although the Omicron variant had negatively impacted bookings (during January 2022), demand is stated to have picked up and rebounded to pre-Omicron levels. With global trends improving, the company expects the recovery momentum to continue in the upcoming periods as well.
Earnings & Revenues Discussion
In the quarter under review, Marriott’s adjusted earnings per share (EPS) were $1.30, surpassing the Zacks Consensus Estimate of $1.02. In the prior-year quarter, the company had reported adjusted earnings of 12 cents per share.
Quarterly revenues of $4,446 million surpassed the consensus mark of $3,859 million. Moreover, the top line surged 104.7% on a year-over-year basis. During the quarter, revenues from Base management and Franchise fee came in at $669 million and $1,790 million compared with $443 million and $1,153 million reported in the prior-year quarter.
RevPAR & Margins
In the quarter under review, RevPAR for worldwide comparable system-wide properties fell 19% (in constant dollars) compared with 2019 levels. The downside was primarily driven by a fall in occupancy and average daily rate (ADR). Occupancy and ADR declined 11.9% and 2.3%, respectively, from 2019 levels. These metrics were impacted by the coronavirus pandemic.
Comparable system-wide RevPAR in Asia Pacific (excluding China) fell 48.4% (in constant dollars) from 2019 levels. Occupancy and ADR had fallen 24.9% and 22.6%, respectively, from 2019 levels. Comparable system-wide RevPAR in Greater China fell 27.4% from 2019 levels.
On a constant-dollar basis, international comparable system-wide RevPAR fell 28.2% compared with 2019 levels. Occupancy and ADR declined 17.7% and 3.9%, respectively, from 2019 levels. Comparable system-wide RevPAR in Europe and the Caribbean & Latin America declined 34.2% and 9.2%, respectively, from 2019 levels.
Total expenses during the quarter increased 65.7% year over year to $ 3,811 million, primarily owing to a rise in Reimbursed expenses.
During the fourth quarter, adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) amounted to $741 million compared with $317 million in the prior-year quarter.
Balance sheet
At the end of the fourth quarter, Marriott's total debt amounted to $8.7 billion compared with $9 billion in the previous quarter.
Unit Developments
At the end of fourth-quarter 2021, Marriott's development pipeline totaled nearly 2,831 hotels, with approximately 485,000 rooms. Nearly 202,000 rooms were under construction.
During the quarter, the company added 120 new properties (20,440 rooms) to its worldwide lodging portfolio.
2021 Highlights
Total revenues in 2021 came in at $13,857 million compared with $10,571 million in 2020.
Adjusted EBITDA in 2021 came in at $2,278 million compared with $1,147 million in 2020.
In 2021, adjusted diluted EPS came in at $3.19 compared with 18 cents reported in the previous year.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates.
VGM Scores
At this time, Marriott has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with an F. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Marriott has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
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Marriott (MAR) Down 6% Since Last Earnings Report: Can It Rebound?
A month has gone by since the last earnings report for Marriott International (MAR - Free Report) . Shares have lost about 6% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Marriott due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Marriott Q4 Earnings Beat Estimates, Increase Y/Y
Marriott reported impressive fourth-quarter 2021 results, with earnings and revenues beating the Zacks Consensus Estimate as well as increasing on a year-over-year basis.
During the quarter, the company reported improvements in revenue per available room (RevPAR), occupancy and average daily rate (ADR) on account of solid leisure demand as well as recovery in business transient and group demand. Although the Omicron variant had negatively impacted bookings (during January 2022), demand is stated to have picked up and rebounded to pre-Omicron levels. With global trends improving, the company expects the recovery momentum to continue in the upcoming periods as well.
Earnings & Revenues Discussion
In the quarter under review, Marriott’s adjusted earnings per share (EPS) were $1.30, surpassing the Zacks Consensus Estimate of $1.02. In the prior-year quarter, the company had reported adjusted earnings of 12 cents per share.
Quarterly revenues of $4,446 million surpassed the consensus mark of $3,859 million. Moreover, the top line surged 104.7% on a year-over-year basis. During the quarter, revenues from Base management and Franchise fee came in at $669 million and $1,790 million compared with $443 million and $1,153 million reported in the prior-year quarter.
RevPAR & Margins
In the quarter under review, RevPAR for worldwide comparable system-wide properties fell 19% (in constant dollars) compared with 2019 levels. The downside was primarily driven by a fall in occupancy and average daily rate (ADR). Occupancy and ADR declined 11.9% and 2.3%, respectively, from 2019 levels. These metrics were impacted by the coronavirus pandemic.
Comparable system-wide RevPAR in Asia Pacific (excluding China) fell 48.4% (in constant dollars) from 2019 levels. Occupancy and ADR had fallen 24.9% and 22.6%, respectively, from 2019 levels. Comparable system-wide RevPAR in Greater China fell 27.4% from 2019 levels.
On a constant-dollar basis, international comparable system-wide RevPAR fell 28.2% compared with 2019 levels. Occupancy and ADR declined 17.7% and 3.9%, respectively, from 2019 levels. Comparable system-wide RevPAR in Europe and the Caribbean & Latin America declined 34.2% and 9.2%, respectively, from 2019 levels.
Total expenses during the quarter increased 65.7% year over year to $ 3,811 million, primarily owing to a rise in Reimbursed expenses.
During the fourth quarter, adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) amounted to $741 million compared with $317 million in the prior-year quarter.
Balance sheet
At the end of the fourth quarter, Marriott's total debt amounted to $8.7 billion compared with $9 billion in the previous quarter.
Unit Developments
At the end of fourth-quarter 2021, Marriott's development pipeline totaled nearly 2,831 hotels, with approximately 485,000 rooms. Nearly 202,000 rooms were under construction.
During the quarter, the company added 120 new properties (20,440 rooms) to its worldwide lodging portfolio.
2021 Highlights
Total revenues in 2021 came in at $13,857 million compared with $10,571 million in 2020.
Adjusted EBITDA in 2021 came in at $2,278 million compared with $1,147 million in 2020.
In 2021, adjusted diluted EPS came in at $3.19 compared with 18 cents reported in the previous year.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates.
VGM Scores
At this time, Marriott has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with an F. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Marriott has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.