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Here's Why Investors Should Retain Marriott Vacations (VAC) Now
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Marriott Vacations Worldwide Corporation (VAC - Free Report) will likely benefit from vacation ownership business, digital initiatives and robust contract sales. However, coronavirus-induced disruptions and increased expenses are a concern.
Let’s delve deeper into the factors highlighting why investors should retain the stock for the time being.
Factors Driving Growth
Marriott Vacations focuses on high vacation ownership business to drive growth. During the second quarter of 2022, the company launched a new Owner benefit and exchange program — Abound by Marriott Vacations. The program focuses on unifying Marriott branded vacation ownership products by providing access to more than 90 branded resorts (including Marriott Vacation Club, Sheraton Vacation Club and Westin Vacation Club) using a common points currency. It also offers access to more than 8,000 Marriott Bonvoy hotels, 2,000 vacation homes and 2,000 unique experiences (like cruises, guided and culinary tours, premiere events and outdoor adventures). The company intends to leverage the program with technological investments to drive growth in the upcoming periods.
VAC emphasizes on increasing the use of digital tools to strengthen its infrastructure, grow online package sales, enable self-service bookings, make real-time offerings to enhance the overall customer experience and drive back-office efficiencies. Also, the company is making good progress on the technology needed to link Marriott, Westin and Sheraton products into a single points-based offering. The initiative brings the respective vacation ownership products together, allowing users with more destinations and flexible usage options across the Marriott-branded portfolio. During the second quarter of 2022, the company initiated the rollout of its newly-unified product and reported positive owner feedback on account of the same.
Marriott Vacations have been witnessing improvement in occupancy rates, thereby highlighting people’s willingness to go on vacations. During the second quarter of 2022, the company reported solid occupancies with respect to its Aqua-Aston business. The company reported year-over-year growth in occupancies and RevPAR. Also, it reported a solid recovery in domestic markets (Hawaii) and Asia-Pacific. Much optimism prevails as the company noted increasing willingness among customers to resume travel.
Marriott Vacations continues to witness robust recovery during second-quarter 2022. While occupancies and tours are witnessing growth in the second quarter, Volume per guest (or VPG) remains well above the 2019 levels. The company reported benefits from its development and rental businesses. VAC reported contract sales of $506 million in the second quarter of 2022, up 40% from $362 million reported in the prior-year quarter. For the second half of 2022, VAC anticipates contract sales to grow double-digits (on a year-over-year basis), backed by an increase in tours and strength in VPGs.
Image Source: Zacks Investment Research
Shares of Marriott Vacations have gained 8.3% in the past three months against the industry’s 3.2% fall.
Concerns
Marriott Vacations has been bearing the brunt of steep expenses for some time now. During the second quarter of 2022, total expenses in the quarter increased 10% year over year to $957 million from $870 million reported in the year-ago quarter. Escalated marketing and sales expenses and management and exchange costs affected total costs. The company anticipates the inflationary environment to affect margins for some time.
Although improvements were noted in rental occupancies because of easing travel restrictions and quarantine requirements, the company stated complete recovery to take time. Uncertainty related to pandemic-induced implications is a concern.
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The Zacks Consensus Estimate for CROX’s 2022 sales and earnings per share (EPS) indicates a rise of 49.7% and 20.7%, respectively, from the year-ago period’s levels.
Hyatt sports a Zacks Rank #1. H has a trailing four-quarter earnings surprise of 798.8%, on average. The stock has declined 5.1% in the past year.
The Zacks Consensus Estimate for H’s current financial year sales and EPS indicates growth of 89.1% and 113%, respectively, from the year-ago period’s reported levels.
Boyd Gaming carries a Zacks Rank #2 (Buy). BYD has a long-term earnings growth rate of 9.8%. The stock has declined 24.6% in the past year.
The Zacks Consensus Estimate for BYD’s current financial year sales and EPS indicates growth of 3.1% and 7%, respectively, from the year-ago period’s reported levels.
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Here's Why Investors Should Retain Marriott Vacations (VAC) Now
Marriott Vacations Worldwide Corporation (VAC - Free Report) will likely benefit from vacation ownership business, digital initiatives and robust contract sales. However, coronavirus-induced disruptions and increased expenses are a concern.
Let’s delve deeper into the factors highlighting why investors should retain the stock for the time being.
Factors Driving Growth
Marriott Vacations focuses on high vacation ownership business to drive growth. During the second quarter of 2022, the company launched a new Owner benefit and exchange program — Abound by Marriott Vacations. The program focuses on unifying Marriott branded vacation ownership products by providing access to more than 90 branded resorts (including Marriott Vacation Club, Sheraton Vacation Club and Westin Vacation Club) using a common points currency. It also offers access to more than 8,000 Marriott Bonvoy hotels, 2,000 vacation homes and 2,000 unique experiences (like cruises, guided and culinary tours, premiere events and outdoor adventures). The company intends to leverage the program with technological investments to drive growth in the upcoming periods.
VAC emphasizes on increasing the use of digital tools to strengthen its infrastructure, grow online package sales, enable self-service bookings, make real-time offerings to enhance the overall customer experience and drive back-office efficiencies. Also, the company is making good progress on the technology needed to link Marriott, Westin and Sheraton products into a single points-based offering. The initiative brings the respective vacation ownership products together, allowing users with more destinations and flexible usage options across the Marriott-branded portfolio. During the second quarter of 2022, the company initiated the rollout of its newly-unified product and reported positive owner feedback on account of the same.
Marriott Vacations have been witnessing improvement in occupancy rates, thereby highlighting people’s willingness to go on vacations. During the second quarter of 2022, the company reported solid occupancies with respect to its Aqua-Aston business. The company reported year-over-year growth in occupancies and RevPAR. Also, it reported a solid recovery in domestic markets (Hawaii) and Asia-Pacific. Much optimism prevails as the company noted increasing willingness among customers to resume travel.
Marriott Vacations continues to witness robust recovery during second-quarter 2022. While occupancies and tours are witnessing growth in the second quarter, Volume per guest (or VPG) remains well above the 2019 levels. The company reported benefits from its development and rental businesses. VAC reported contract sales of $506 million in the second quarter of 2022, up 40% from $362 million reported in the prior-year quarter. For the second half of 2022, VAC anticipates contract sales to grow double-digits (on a year-over-year basis), backed by an increase in tours and strength in VPGs.
Image Source: Zacks Investment Research
Shares of Marriott Vacations have gained 8.3% in the past three months against the industry’s 3.2% fall.
Concerns
Marriott Vacations has been bearing the brunt of steep expenses for some time now. During the second quarter of 2022, total expenses in the quarter increased 10% year over year to $957 million from $870 million reported in the year-ago quarter. Escalated marketing and sales expenses and management and exchange costs affected total costs. The company anticipates the inflationary environment to affect margins for some time.
Although improvements were noted in rental occupancies because of easing travel restrictions and quarantine requirements, the company stated complete recovery to take time. Uncertainty related to pandemic-induced implications is a concern.
Zacks Rank and Stocks to Consider
Marriott Vacations currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Some better-ranked stocks in the Zacks Consumer Discretionary sector are Crocs, Inc. (CROX - Free Report) , Hyatt Hotels Corporation (H - Free Report) and Boyd Gaming Corporation (BYD - Free Report) .
Crocs sports a Zacks Rank #1. CROX has a long-term earnings growth rate of 15%. Shares of Crocs have decreased 42.5% in the past year.
The Zacks Consensus Estimate for CROX’s 2022 sales and earnings per share (EPS) indicates a rise of 49.7% and 20.7%, respectively, from the year-ago period’s levels.
Hyatt sports a Zacks Rank #1. H has a trailing four-quarter earnings surprise of 798.8%, on average. The stock has declined 5.1% in the past year.
The Zacks Consensus Estimate for H’s current financial year sales and EPS indicates growth of 89.1% and 113%, respectively, from the year-ago period’s reported levels.
Boyd Gaming carries a Zacks Rank #2 (Buy). BYD has a long-term earnings growth rate of 9.8%. The stock has declined 24.6% in the past year.
The Zacks Consensus Estimate for BYD’s current financial year sales and EPS indicates growth of 3.1% and 7%, respectively, from the year-ago period’s reported levels.