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Marriott (MAR) Up 6.8% Since Last Earnings Report: Can It Continue?
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It has been about a month since the last earnings report for Marriott International (MAR - Free Report) . Shares have added about 6.8% 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 its most recent earnings report in order to get a better handle on the important catalysts.
Marriott Q4 Earnings Surpass Estimates, Revenues Miss
Marriott reported fourth-quarter 2023 results, wherein earnings surpassed the Zacks Consensus Estimate but revenues missed the same. The top and bottom lines increased on a year-over-year basis. The upside was backed by solid leisure demand and recovery in business transient and group demand. It also benefited from its fee-driven, asset-light business model.
The company reported strength in The Marriott Bonvoy loyalty program, comprising 196 million members as of 2023-end. It expanded its co-brand credit card offerings to 31 cards (across 11 countries), representing an increase of 11% in global card spending on a year-over-year basis.
Earnings & Revenue Discussion
In the quarter under review, Marriott’s adjusted earnings per share (EPS) were $3.57, which beat the Zacks Consensus Estimate of $2.12. The company reported adjusted earnings of $1.96 per share in the prior-year quarter.
Quarterly revenues of $6.1 billion missed the consensus mark of $6.3 billion. The top line improved 2.9% on a year-over-year basis.
Revenues from Base management and Franchise fees came in at $321 million and $705 million, respectively, up 12% and 7% year over year. Increased revenues per available room (RevPAR) and unit growth primarily backed this uptick. We estimate the metrics to be $318.8 million and $711.5 million, respectively.
Incentive management fees during the quarter reached $218 million, reflecting a rise of 17% from $106 million in the prior-year quarter.
RevPAR & Margins
RevPAR for worldwide comparable system-wide properties jumped 7.2% (in constant dollars) year over year. This was primarily backed by a 3% increase in ADR. Occupancy improved by 2.6% from 2022 levels.
Comparable system-wide RevPAR in the Asia Pacific (excluding China) climbed 13.3% (in constant dollars) year over year. Occupancy increased 3.1% year over year, while ADR rose 8.5% from 2022 levels. Comparable system-wide RevPAR in Greater China grew 80.9% year over year. On a constant-dollar basis, international comparable system-wide RevPAR increased 17.4% year over year. Occupancy and ADR gained 8.1% and 3.6% year over year, respectively. Comparable system-wide RevPAR in Europe gained 9.5% year over year. RevPAR in the Caribbean & Latin America rose 3.1% from 2022 levels.
Total expenses during the quarter increased 9% year over year to $5.4 billion, primarily owing to a rise in reimbursed expenses. Our estimate was pegged at $5.2 billion. Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) amounted to $1.2 billion, up 10% from the prior-year quarter. We predicted the metric to be $1.1 billion.
Balance Sheet
At the fourth-quarter end, Marriott's total debt reached $11.9 billion compared with $11.8 billion in the previous quarter. Cash and cash equivalents, as of Dec 31, 2023, came in at $0.3 billion compared with $0.7 billion in the previous quarter.
In 2023, the company repurchased 21.5 million shares of its common stock worth $3.9 billion.
Unit Developments
At the end of fourth-quarter 2023, Marriott's development pipeline totaled 3,379 hotels, with approximately 573,000 rooms. More than 232,000 rooms were under construction. In 2023, the company added 558 properties (81,281 rooms) to its worldwide lodging portfolio.
2023 Highlights
Total revenues in 2023 came in at $23.7 billion compared with $20.8 billion in 2022.
Adjusted EBITDA in 2023 came in at $4.7 billion compared with $3.9 billion in 2022. In 2023, adjusted diluted EPS came in at $9.99 compared with $6.69 reported in the previous year.
Outlook
For first-quarter 2024, management anticipates gross fee revenues in the range of $1.19-$1.2 billion. Adjusted EBITDA is expected between $1.12 billion and $1.15 billion. MAR estimates first-quarter EPS between $2.12 and $2.19. For the first quarter, the company projects worldwide system-wide RevPAR to increase 4-5% year over year.
For 2024, MAR forecasts gross fee revenues in the range of $5.1-$5.2 billion. General and administrative expenses are projected in the range of $1.02-$1.04 billion. Adjusted EBITDA is expected between $4.9-$5.01 billion. It envisions 2024 EPS in the band of $9.18-$9.52.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended downward during the past month.
The consensus estimate has shifted -5.45% due to these changes.
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 a D. Following the exact same course, 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 #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Marriott belongs to the Zacks Hotels and Motels industry. Another stock from the same industry, Hilton Worldwide Holdings Inc. (HLT - Free Report) , has gained 8.2% over the past month. More than a month has passed since the company reported results for the quarter ended December 2023.
Hilton Worldwide Holdings Inc. reported revenues of $2.61 billion in the last reported quarter, representing a year-over-year change of +6.8%. EPS of $1.68 for the same period compares with $1.59 a year ago.
Hilton Worldwide Holdings Inc. is expected to post earnings of $1.42 per share for the current quarter, representing a year-over-year change of +14.5%. Over the last 30 days, the Zacks Consensus Estimate has changed 0%.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Hilton Worldwide Holdings Inc. Also, the stock has a VGM Score of C.
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Marriott (MAR) Up 6.8% Since Last Earnings Report: Can It Continue?
It has been about a month since the last earnings report for Marriott International (MAR - Free Report) . Shares have added about 6.8% 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 its most recent earnings report in order to get a better handle on the important catalysts.
Marriott Q4 Earnings Surpass Estimates, Revenues Miss
Marriott reported fourth-quarter 2023 results, wherein earnings surpassed the Zacks Consensus Estimate but revenues missed the same. The top and bottom lines increased on a year-over-year basis. The upside was backed by solid leisure demand and recovery in business transient and group demand. It also benefited from its fee-driven, asset-light business model.
The company reported strength in The Marriott Bonvoy loyalty program, comprising 196 million members as of 2023-end. It expanded its co-brand credit card offerings to 31 cards (across 11 countries), representing an increase of 11% in global card spending on a year-over-year basis.
Earnings & Revenue Discussion
In the quarter under review, Marriott’s adjusted earnings per share (EPS) were $3.57, which beat the Zacks Consensus Estimate of $2.12. The company reported adjusted earnings of $1.96 per share in the prior-year quarter.
Quarterly revenues of $6.1 billion missed the consensus mark of $6.3 billion. The top line improved 2.9% on a year-over-year basis.
Revenues from Base management and Franchise fees came in at $321 million and $705 million, respectively, up 12% and 7% year over year. Increased revenues per available room (RevPAR) and unit growth primarily backed this uptick. We estimate the metrics to be $318.8 million and $711.5 million, respectively.
Incentive management fees during the quarter reached $218 million, reflecting a rise of 17% from $106 million in the prior-year quarter.
RevPAR & Margins
RevPAR for worldwide comparable system-wide properties jumped 7.2% (in constant dollars) year over year. This was primarily backed by a 3% increase in ADR. Occupancy improved by 2.6% from 2022 levels.
Comparable system-wide RevPAR in the Asia Pacific (excluding China) climbed 13.3% (in constant dollars) year over year. Occupancy increased 3.1% year over year, while ADR rose 8.5% from 2022 levels. Comparable system-wide RevPAR in Greater China grew 80.9% year over year.
On a constant-dollar basis, international comparable system-wide RevPAR increased 17.4% year over year. Occupancy and ADR gained 8.1% and 3.6% year over year, respectively. Comparable system-wide RevPAR in Europe gained 9.5% year over year. RevPAR in the Caribbean & Latin America rose 3.1% from 2022 levels.
Total expenses during the quarter increased 9% year over year to $5.4 billion, primarily owing to a rise in reimbursed expenses. Our estimate was pegged at $5.2 billion. Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) amounted to $1.2 billion, up 10% from the prior-year quarter. We predicted the metric to be $1.1 billion.
Balance Sheet
At the fourth-quarter end, Marriott's total debt reached $11.9 billion compared with $11.8 billion in the previous quarter. Cash and cash equivalents, as of Dec 31, 2023, came in at $0.3 billion compared with $0.7 billion in the previous quarter.
In 2023, the company repurchased 21.5 million shares of its common stock worth $3.9 billion.
Unit Developments
At the end of fourth-quarter 2023, Marriott's development pipeline totaled 3,379 hotels, with approximately 573,000 rooms. More than 232,000 rooms were under construction. In 2023, the company added 558 properties (81,281 rooms) to its worldwide lodging portfolio.
2023 Highlights
Total revenues in 2023 came in at $23.7 billion compared with $20.8 billion in 2022.
Adjusted EBITDA in 2023 came in at $4.7 billion compared with $3.9 billion in 2022. In 2023, adjusted diluted EPS came in at $9.99 compared with $6.69 reported in the previous year.
Outlook
For first-quarter 2024, management anticipates gross fee revenues in the range of $1.19-$1.2 billion. Adjusted EBITDA is expected between $1.12 billion and $1.15 billion. MAR estimates first-quarter EPS between $2.12 and $2.19. For the first quarter, the company projects worldwide system-wide RevPAR to increase 4-5% year over year.
For 2024, MAR forecasts gross fee revenues in the range of $5.1-$5.2 billion. General and administrative expenses are projected in the range of $1.02-$1.04 billion. Adjusted EBITDA is expected between $4.9-$5.01 billion. It envisions 2024 EPS in the band of $9.18-$9.52.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended downward during the past month.
The consensus estimate has shifted -5.45% due to these changes.
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 a D. Following the exact same course, 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 #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Marriott belongs to the Zacks Hotels and Motels industry. Another stock from the same industry, Hilton Worldwide Holdings Inc. (HLT - Free Report) , has gained 8.2% over the past month. More than a month has passed since the company reported results for the quarter ended December 2023.
Hilton Worldwide Holdings Inc. reported revenues of $2.61 billion in the last reported quarter, representing a year-over-year change of +6.8%. EPS of $1.68 for the same period compares with $1.59 a year ago.
Hilton Worldwide Holdings Inc. is expected to post earnings of $1.42 per share for the current quarter, representing a year-over-year change of +14.5%. Over the last 30 days, the Zacks Consensus Estimate has changed 0%.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Hilton Worldwide Holdings Inc. Also, the stock has a VGM Score of C.