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Marriott (MAR) Boosts Brand Lineup With City Express Addition
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Marriott International, Inc. (MAR - Free Report) recently entered into an agreement with Hoteles City Express to acquire the City Express brand portfolio. This marks the 31st brand entry in Marriott’s midscale segment.
Quoted at $100 million, the acquisition facilitates the addition of hotels (including City Express, City Express Plus, City Express Suites, City Express Junior, and City Centro) and franchise rights to five under-construction projects (representing an additional 676 rooms). It also includes integration of associated trademarks, domains and related intellectual property, the City Premios loyalty program and other assets and liabilities related to the brand. The transaction will enable Marriott to boost its presence in the Caribbean and Latin America ("CALA") region by 45%, to 486 properties across 37 countries.
Anthony Capuano, chief executive officer, Marriott International, stated, "We're excited to enter a new lodging category – the popular affordable midscale segment where we see significant potential. With City Express by Marriott, we will be providing our customers with more choice through a new, approachable, moderate-priced offering, increasing opportunity for owners and franchisees as well as associates."
Given the high-growth nature of the affordable midscale segment, the company sees a meaningful opportunity to further expand the City Express by Marriott brand in the CALA region and other locations. The company stated that the transaction is subject to regulatory approvals and will likely be sealed between 2022-end and the first half of 2023.
Price Performance
Image Source: Zacks Investment Research
Coming to price performance, shares of Marriott have declined 2.1% in the past year compared with the industry’s 15.4% fall. The company is benefiting from its focus on expansion initiatives, digital innovation and the loyalty program. The company is gaining from the reopening of international borders and leniency in travel restrictions. During the second quarter of 2022, the company reported a strong RevPAR recovery in Europe. Also, group demand in the United States and Canada increased sharply during the quarter, leading to improved occupancies and strength in ADR. With global trends improving, the company expects the recovery momentum to continue in the future. Meanwhile, earnings estimates for 2022 have increased in the past 60 days, depicting analysts’ optimism regarding the stock growth potential.
Crocs sports a Zacks Rank #1 (Strong Buy). CROX has a long-term earnings growth rate of 15%. Shares of Crocs have decreased 43.3% in the past year.
The Zacks Consensus Estimate for CROX’s 2022 sales and 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 inched up 4.4% in the past year.
The Zacks Consensus Estimate for H’s current financial year sales and EPS indicates a surge 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 11.4%. The stock has declined 19.8% in the past year.
The Zacks Consensus Estimate for BYD’s current financial year sales and EPS indicates growth of 3.1% and 7.2%, respectively, from the year-ago period’s reported levels.
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Marriott (MAR) Boosts Brand Lineup With City Express Addition
Marriott International, Inc. (MAR - Free Report) recently entered into an agreement with Hoteles City Express to acquire the City Express brand portfolio. This marks the 31st brand entry in Marriott’s midscale segment.
Quoted at $100 million, the acquisition facilitates the addition of hotels (including City Express, City Express Plus, City Express Suites, City Express Junior, and City Centro) and franchise rights to five under-construction projects (representing an additional 676 rooms). It also includes integration of associated trademarks, domains and related intellectual property, the City Premios loyalty program and other assets and liabilities related to the brand. The transaction will enable Marriott to boost its presence in the Caribbean and Latin America ("CALA") region by 45%, to 486 properties across 37 countries.
Anthony Capuano, chief executive officer, Marriott International, stated, "We're excited to enter a new lodging category – the popular affordable midscale segment where we see significant potential. With City Express by Marriott, we will be providing our customers with more choice through a new, approachable, moderate-priced offering, increasing opportunity for owners and franchisees as well as associates."
Given the high-growth nature of the affordable midscale segment, the company sees a meaningful opportunity to further expand the City Express by Marriott brand in the CALA region and other locations. The company stated that the transaction is subject to regulatory approvals and will likely be sealed between 2022-end and the first half of 2023.
Price Performance
Image Source: Zacks Investment Research
Coming to price performance, shares of Marriott have declined 2.1% in the past year compared with the industry’s 15.4% fall. The company is benefiting from its focus on expansion initiatives, digital innovation and the loyalty program. The company is gaining from the reopening of international borders and leniency in travel restrictions. During the second quarter of 2022, the company reported a strong RevPAR recovery in Europe. Also, group demand in the United States and Canada increased sharply during the quarter, leading to improved occupancies and strength in ADR. With global trends improving, the company expects the recovery momentum to continue in the future. Meanwhile, earnings estimates for 2022 have increased in the past 60 days, depicting analysts’ optimism regarding the stock growth potential.
Zacks Rank and Stocks to Consider
Marriott currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank 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 (Strong Buy). CROX has a long-term earnings growth rate of 15%. Shares of Crocs have decreased 43.3% in the past year.
The Zacks Consensus Estimate for CROX’s 2022 sales and 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 inched up 4.4% in the past year.
The Zacks Consensus Estimate for H’s current financial year sales and EPS indicates a surge 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 11.4%. The stock has declined 19.8% in the past year.
The Zacks Consensus Estimate for BYD’s current financial year sales and EPS indicates growth of 3.1% and 7.2%, respectively, from the year-ago period’s reported levels.