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Why Is Marriott (MAR) Down 1.8% Since Last Earnings Report?
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A month has gone by since the last earnings report for Marriott International (MAR - Free Report) . Shares have lost about 1.8% 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 Q1 Earnings & Revenues Top Estimates
Marriott reported impressive first-quarter 2022 results, with earnings and revenues surpassing the Zacks Consensus Estimate. The bottom line outpaced the consensus mark for the seventh straight quarter, while the top line beat the same for the fourth consecutive quarter.
During the quarter, the company witnessed solid demand in the United States, Canada, the Middle East and Africa region. The company benefited from robust leisure demand and improvements in business and cross-border travel. Although the Omicron variant had affected business transient demand (in January), demand is stated to have picked up in March. With global trends improving, the company expects the recovery momentum to continue in the upcoming periods as well.
Earnings & Revenue Discussion
In the quarter under review, Marriott’s adjusted earnings per share (EPS) were $1.25, surpassing the Zacks Consensus Estimate of 95 cents. In the prior-year quarter, the company had reported adjusted earnings of 10 cents per share.
Quarterly revenues of $4,199 million surpassed the consensus mark of $4,172 million. The top line surged 81.3% on a year-over-year basis. During the quarter, revenues from Base management and Franchise fee came in at $213 million and $500 million compared with $106 million and $306 million reported in the prior-year quarter.
RevPAR & Margins
In the quarter under review, RevPAR for worldwide comparable system-wide properties fell 19.4% (in constant dollars) compared with 2019 levels. The downside was primarily driven by a fall in occupancy (13.6% from 2019 levels). However, the average daily rate (ADR) increased 0.8% from 2019 levels.
Comparable system-wide RevPAR in Asia Pacific (excluding China) fell 48.4% (in constant dollars) from 2019 levels. Occupancy and ADR declined 26.1% and 18.6%, respectively, from 2019 levels. Comparable system-wide RevPAR in Greater China fell 41.9% from 2019 levels.
On a constant-dollar basis, international comparable system-wide RevPAR fell 31.7% compared with 2019 levels. Occupancy and ADR declined 19.8% and 2.4%, respectively, from 2019 levels. Comparable system-wide RevPAR in Europe and the Caribbean & Latin America declined 37.9% and 13.5%, respectively, from 2019 levels.
Total expenses during the quarter increased 63.1% year over year to $ 3,641 million, primarily owing to a rise in Reimbursed expenses.
During the first quarter, adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) amounted to $759 million compared with $296 million reported in the prior-year quarter.
Balance sheet
At the end of the first quarter, Marriott's net debt amounted to $8.5 billion compared with $8.7 billion reported in the previous quarter. Cash and cash equivalents as of Mar 31, 2022, came in at $1 billion compared with $1.4 billion reported in the previous quarter.
The company declared a quarterly cash dividend of 30 cents per share. The dividend will be payable on Jun 30, 2022, to shareholders of record as of May 16, 2022.
Unit Developments
At the end of first-quarter 2022, Marriott's development pipeline totaled nearly 2,878 hotels, with approximately 489,000 rooms. Nearly 201,400 rooms were under construction.
During the quarter, the company added 75 new properties (11,799 rooms) to its worldwide lodging portfolio.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended upward during the past month.
The consensus estimate has shifted 8.82% due to these changes.
VGM Scores
Currently, Marriott has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with a D. Charting a somewhat similar path, the stock was allocated a grade of F on the value side, putting it in the bottom 20% quintile 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 trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Marriott has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.
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Why Is Marriott (MAR) Down 1.8% Since Last Earnings Report?
A month has gone by since the last earnings report for Marriott International (MAR - Free Report) . Shares have lost about 1.8% 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 Q1 Earnings & Revenues Top Estimates
Marriott reported impressive first-quarter 2022 results, with earnings and revenues surpassing the Zacks Consensus Estimate. The bottom line outpaced the consensus mark for the seventh straight quarter, while the top line beat the same for the fourth consecutive quarter.
During the quarter, the company witnessed solid demand in the United States, Canada, the Middle East and Africa region. The company benefited from robust leisure demand and improvements in business and cross-border travel. Although the Omicron variant had affected business transient demand (in January), demand is stated to have picked up in March. With global trends improving, the company expects the recovery momentum to continue in the upcoming periods as well.
Earnings & Revenue Discussion
In the quarter under review, Marriott’s adjusted earnings per share (EPS) were $1.25, surpassing the Zacks Consensus Estimate of 95 cents. In the prior-year quarter, the company had reported adjusted earnings of 10 cents per share.
Quarterly revenues of $4,199 million surpassed the consensus mark of $4,172 million. The top line surged 81.3% on a year-over-year basis. During the quarter, revenues from Base management and Franchise fee came in at $213 million and $500 million compared with $106 million and $306 million reported in the prior-year quarter.
RevPAR & Margins
In the quarter under review, RevPAR for worldwide comparable system-wide properties fell 19.4% (in constant dollars) compared with 2019 levels. The downside was primarily driven by a fall in occupancy (13.6% from 2019 levels). However, the average daily rate (ADR) increased 0.8% from 2019 levels.
Comparable system-wide RevPAR in Asia Pacific (excluding China) fell 48.4% (in constant dollars) from 2019 levels. Occupancy and ADR declined 26.1% and 18.6%, respectively, from 2019 levels. Comparable system-wide RevPAR in Greater China fell 41.9% from 2019 levels.
On a constant-dollar basis, international comparable system-wide RevPAR fell 31.7% compared with 2019 levels. Occupancy and ADR declined 19.8% and 2.4%, respectively, from 2019 levels. Comparable system-wide RevPAR in Europe and the Caribbean & Latin America declined 37.9% and 13.5%, respectively, from 2019 levels.
Total expenses during the quarter increased 63.1% year over year to $ 3,641 million, primarily owing to a rise in Reimbursed expenses.
During the first quarter, adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) amounted to $759 million compared with $296 million reported in the prior-year quarter.
Balance sheet
At the end of the first quarter, Marriott's net debt amounted to $8.5 billion compared with $8.7 billion reported in the previous quarter. Cash and cash equivalents as of Mar 31, 2022, came in at $1 billion compared with $1.4 billion reported in the previous quarter.
The company declared a quarterly cash dividend of 30 cents per share. The dividend will be payable on Jun 30, 2022, to shareholders of record as of May 16, 2022.
Unit Developments
At the end of first-quarter 2022, Marriott's development pipeline totaled nearly 2,878 hotels, with approximately 489,000 rooms. Nearly 201,400 rooms were under construction.
During the quarter, the company added 75 new properties (11,799 rooms) to its worldwide lodging portfolio.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended upward during the past month.
The consensus estimate has shifted 8.82% due to these changes.
VGM Scores
Currently, Marriott has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with a D. Charting a somewhat similar path, the stock was allocated a grade of F on the value side, putting it in the bottom 20% quintile 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 trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Marriott has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.