Marriott Vacations Worldwide Corp. (VAC Quick QuoteVAC - Free Report) is scheduled to report third-quarter 2017 numbers on Nov 2, before the opening bell.

Being one of the major players in the timeshare industry, Marriott Vacations is poised to benefit from positive timeshare industry trends. In fact, the company has been able to maintain a steady flow of clients by offering tours to diverse locations and programs with greater outreach.

Marriott Vacations expects to continue driving contract sales and rental revenues in the third quarter via its two major growth initiatives. The first being tours from marketing programs, namely call transfer and universal encore programs and secondly, by additional sales distributions at its new locations.

In fact, in the last two quarters the company’s new distribution points have driven roughly 7 and 10 percentage points of contract sales growth in the United States. This promising performance is expected to continue into the third quarter as well.

The Zacks Consensus Estimate for the quarter’s sales is pegged at $467.2 million, reflecting an increase of 14.8% year over year. Meanwhile, the same for the quarter’s earnings is pegged at $1.11 per share, implying a 15.6% year-over-year improvement.

Nevertheless, the company’s increased marketing expenses might pressurize the third-quarter margins as the timeshare industry is extensively marketing-oriented and relies heavily on sales initiatives to attract customers.

Additionally, management expects that the utilization of rental availability for preview room nights to increase tours could be a headwind to rental margins in the second half of 2017. In fact, factoring in higher preview activity and the negative impact of seasonality, rental revenues net of expenses are expected to be lower year over year in 2017.

Taking into account the headwinds, our quantitative model predicts that Marriott Vacations does not have the right combination of two main ingredients — a positive Earnings ESP and a Zacks Rank #3 (Hold) or higher — for increasing the odds of an earnings beat.

Zacks ESP: Marriott Vacations has an Earnings ESP of -21.62%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Marriott Vacations carries a Zacks Rank #3, which increases the predictive power of ESP. However, we also need a positive ESP to be confident of an earnings beat.

Conversely, we caution against stocks with a Zacks Rank #4 or 5 (Sell rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Here are some hotel stocks that you may want to consider as these have the right combination of elements to post earnings beat this quarter:

Choice Hotels International, Inc. (CHH Quick QuoteCHH - Free Report) has an Earnings ESP of +1.26% and a Zacks Rank #2 (Buy).

Marriott International, Inc. (MAR Quick QuoteMAR - Free Report) has an Earnings ESP of +0.17% and a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Belmond Ltd. has an Earnings ESP of +6.25% and a Zacks Rank #3.

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