We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Marriott (MAR) Up 0.9% Since Last Earnings Report: Can It Continue?
Read MoreHide Full Article
A month has gone by since the last earnings report for Marriott International (MAR - Free Report) . Shares have added about 0.9% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Marriott due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Marriott Q2 Earnings & Revenues Top Estimates, Rise Y/Y
Marriott reported impressive second-quarter 2023 results, with earnings and revenues surpassing the Zacks Consensus Estimate. The top and the bottom line increased on a year-over-year basis. The upside was primarily driven by robust leisure demand and solid global booking trends. Also, substantial revenue per available room (RevPAR) growth in international markets added to the upside.
Earnings & Revenue Discussion
In the quarter under review, Marriott’s adjusted earnings per share were $2.26, surpassing the Zacks Consensus Estimate of $2.19. The company reported adjusted earnings of $1.80 per share in the prior-year quarter.
Quarterly revenues of $6,075 million surpassed the consensus mark of $6,047 million. The top line surged 13.8% on a year-over-year basis.
During the second quarter, revenues from Base management and Franchise fees came in at $318 million and $739 million compared with $269 million and $669 million reported in the prior-year quarter. RevPAR increases and unit growth primarily backed the upside.
Incentive management fees during the quarter came at $193 million, reflecting a rise of 43% from $135 million reported in the prior-year quarter.
RevPAR & Margins
In the quarter under review, RevPAR for worldwide comparable system-wide properties increased 13.5% (in constant dollars) from 2022 levels. The upside was primarily backed by a 6% increase in ADR from 2022 levels. Occupancy increased by 4.7% from 2022 levels.
Comparable system-wide RevPAR in the Asia Pacific (excluding China) increased 47.6% (in constant dollars) year over year. Occupancy increased 9.3% year over year, while ADR increased 27.1% from 2022 levels. Comparable system-wide RevPAR in Greater China increased 125.2% year over year.
On a constant-dollar basis, international comparable system-wide RevPAR increased 39.1% from 2022 levels. Occupancy gained 12.4% year over year, while ADR was up 13.7% from 2022 levels. Comparable system-wide RevPAR in Europe increased 24.5%, while RevPAR in the Caribbean & Latin America increased 11.9% from 2022 levels.
Total expenses during the quarter increased 13.5% year over year to $4,979 million, primarily owing to a rise in Reimbursed expenses.
During the first quarter, adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) amounted to $1,219 million compared with $1,019 million reported in the prior-year quarter.
Balance sheet
At the end of the second quarter, Marriott's total debt amounted to $11.3 billion compared with $10.7 billion reported in the previous quarter. Cash and cash equivalents, as of Jun 30, 2023, came in at $0.6 billion, flat sequentially. Year to date (through Jul 28, 2023), the company repurchased 13.6 million shares of its common stock worth $2.3 billion.
Unit Developments
At the end of second-quarter 2023, Marriott's development pipeline totaled 3,149 hotels, with approximately 547,000 rooms. More than 240,000 rooms were under construction. During the quarter, the company added 254 properties (33,097 rooms) to its worldwide lodging portfolio.
Outlook
For third-quarter 2023, the company anticipates gross fee revenues in the range of $1,185-$1,210 million. Adjusted EBITDA is expected between $1,105 million and $1,140 million. The company expects third-quarter diluted EPS to be between $2 and $2.09.
For the third quarter, the company anticipates worldwide system-wide RevPAR to increase 6-8% from 2022 levels. RevPAR in the United States and Canada is expected to increase 2-4% from 2022 levels. International RevPAR is expected in the range of 17-19% from 2022 levels. The company anticipates worldwide system-wide RevPAR in 2023 to increase 12-14% year over year compared with the previous growth expectations of 10-13% year over year.
For 2023, the company anticipates gross fee revenues in the range of $4,730 to $4,820 compared with the previous projection of $4,600-$4,750 million. General and administrative expenses for 2023 are projected between $935 million and $915 million. Adjusted EBITDA is expected between $4,535 to $4,650 compared with the previous expectation of $4,360 million to $4,540 million. It projects 2023 diluted EPS in the range of $8.36-$8.65, up from the previous expectation $7.97-$8.42.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates.
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. However, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Marriott has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Marriott (MAR) Up 0.9% Since Last Earnings Report: Can It Continue?
A month has gone by since the last earnings report for Marriott International (MAR - Free Report) . Shares have added about 0.9% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Marriott due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Marriott Q2 Earnings & Revenues Top Estimates, Rise Y/Y
Marriott reported impressive second-quarter 2023 results, with earnings and revenues surpassing the Zacks Consensus Estimate. The top and the bottom line increased on a year-over-year basis. The upside was primarily driven by robust leisure demand and solid global booking trends. Also, substantial revenue per available room (RevPAR) growth in international markets added to the upside.
Earnings & Revenue Discussion
In the quarter under review, Marriott’s adjusted earnings per share were $2.26, surpassing the Zacks Consensus Estimate of $2.19. The company reported adjusted earnings of $1.80 per share in the prior-year quarter.
Quarterly revenues of $6,075 million surpassed the consensus mark of $6,047 million. The top line surged 13.8% on a year-over-year basis.
During the second quarter, revenues from Base management and Franchise fees came in at $318 million and $739 million compared with $269 million and $669 million reported in the prior-year quarter. RevPAR increases and unit growth primarily backed the upside.
Incentive management fees during the quarter came at $193 million, reflecting a rise of 43% from $135 million reported in the prior-year quarter.
RevPAR & Margins
In the quarter under review, RevPAR for worldwide comparable system-wide properties increased 13.5% (in constant dollars) from 2022 levels. The upside was primarily backed by a 6% increase in ADR from 2022 levels. Occupancy increased by 4.7% from 2022 levels.
Comparable system-wide RevPAR in the Asia Pacific (excluding China) increased 47.6% (in constant dollars) year over year. Occupancy increased 9.3% year over year, while ADR increased 27.1% from 2022 levels. Comparable system-wide RevPAR in Greater China increased 125.2% year over year.
On a constant-dollar basis, international comparable system-wide RevPAR increased 39.1% from 2022 levels. Occupancy gained 12.4% year over year, while ADR was up 13.7% from 2022 levels. Comparable system-wide RevPAR in Europe increased 24.5%, while RevPAR in the Caribbean & Latin America increased 11.9% from 2022 levels.
Total expenses during the quarter increased 13.5% year over year to $4,979 million, primarily owing to a rise in Reimbursed expenses.
During the first quarter, adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) amounted to $1,219 million compared with $1,019 million reported in the prior-year quarter.
Balance sheet
At the end of the second quarter, Marriott's total debt amounted to $11.3 billion compared with $10.7 billion reported in the previous quarter. Cash and cash equivalents, as of Jun 30, 2023, came in at $0.6 billion, flat sequentially. Year to date (through Jul 28, 2023), the company repurchased 13.6 million shares of its common stock worth $2.3 billion.
Unit Developments
At the end of second-quarter 2023, Marriott's development pipeline totaled 3,149 hotels, with approximately 547,000 rooms. More than 240,000 rooms were under construction. During the quarter, the company added 254 properties (33,097 rooms) to its worldwide lodging portfolio.
Outlook
For third-quarter 2023, the company anticipates gross fee revenues in the range of $1,185-$1,210 million. Adjusted EBITDA is expected between $1,105 million and $1,140 million. The company expects third-quarter diluted EPS to be between $2 and $2.09.
For the third quarter, the company anticipates worldwide system-wide RevPAR to increase 6-8% from 2022 levels. RevPAR in the United States and Canada is expected to increase 2-4% from 2022 levels. International RevPAR is expected in the range of 17-19% from 2022 levels. The company anticipates worldwide system-wide RevPAR in 2023 to increase 12-14% year over year compared with the previous growth expectations of 10-13% year over year.
For 2023, the company anticipates gross fee revenues in the range of $4,730 to $4,820 compared with the previous projection of $4,600-$4,750 million. General and administrative expenses for 2023 are projected between $935 million and $915 million. Adjusted EBITDA is expected between $4,535 to $4,650 compared with the previous expectation of $4,360 million to $4,540 million. It projects 2023 diluted EPS in the range of $8.36-$8.65, up from the previous expectation $7.97-$8.42.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates.
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. However, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Marriott has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.