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Factors Setting the Tone for Marriott's (MAR) Q2 Earnings
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Marriott International, Inc. (MAR - Free Report) is scheduled to report second-quarter 2019 results on Aug 5, after the closing bell. In the last reported quarter, the company’s earnings beat the Zacks Consensus Estimate by 5.2%. Additionally, it posted an average trailing four-quarter positive earnings surprise of 16.3%.
Q2 Expectations
The Zacks Consensus Estimate for second-quarter earnings is pegged at $1.56, lower than $1.73 reported in the prior-year quarter. Over the past 30 days, the company’s earnings estimates have witnessed downward revision by a penny. For quarterly revenues, the consensus mark is pinned at nearly $5,531 million, suggesting growth of 3.5% from the year-ago quarter reported figure.
Let us delve deeper into factors that are likely to influence Marriott second-quarter results.
Factors at Play
Marriott’s top line in the to-be-reported quarter is likely to be driven by a surge in franchise fees and base management fees. The Zacks Consensus Estimate for franchise fees is likely to increase 8.8% to $517 million, whereas the same for base management fees is expected to climb 2.3% to $307 million. Moreover, for the second quarter of 2019, the company expects comparable system-wide RevPAR to increase in the range of 1-2% in North America (at constant currency). Marriott anticipates the same to rise 2-4% outside North America and approximately 1-3% worldwide.
Rising demand for hotels in international markets and expansion of Marriott’s brands are also likely to provide a boost to the top line in the second quarter. Meanwhile, strong room growth is driving the company’s performance. Marriott is optimistic about its growth potential in the Asia Pacific market.
Marriott efforts to capitalize on global travel trends in China, India and Indonesia also bode well. High population along with a burgeoning middle class is expected to help the company derive profits from operations in these countries.
Earnings in the quarter are likely to decline due to tough year-over-year comparison. In the prior-year quarter, the company registered a gain of 26 cents from the sale of hotels.
Our proven model does not show that Marriott is likely to beat earnings estimates in the second quarter. This is because a stock needs to have both — a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) — for this to happen. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Here are some stocks from the Consumer Discretionary sector that investors may consider as our model shows that these have the right combination of elements to come up with an earnings beat in the to-be-reported quarter:
SeaWorld has an Earnings ESP of +11.01% and a Zacks Rank #2. The company is scheduled to report quarterly numbers on Aug 6.
Callaway Golf sports a Zacks Rank #1 and is supposed to report quarterly results on Aug 8. The company’s Earnings ESP is +2.97%.
Wynn Resorts (WYNN - Free Report) has a Zacks Rank #3 and an Earnings ESP of +2.65%.
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Factors Setting the Tone for Marriott's (MAR) Q2 Earnings
Marriott International, Inc. (MAR - Free Report) is scheduled to report second-quarter 2019 results on Aug 5, after the closing bell. In the last reported quarter, the company’s earnings beat the Zacks Consensus Estimate by 5.2%. Additionally, it posted an average trailing four-quarter positive earnings surprise of 16.3%.
Q2 Expectations
The Zacks Consensus Estimate for second-quarter earnings is pegged at $1.56, lower than $1.73 reported in the prior-year quarter. Over the past 30 days, the company’s earnings estimates have witnessed downward revision by a penny. For quarterly revenues, the consensus mark is pinned at nearly $5,531 million, suggesting growth of 3.5% from the year-ago quarter reported figure.
Let us delve deeper into factors that are likely to influence Marriott second-quarter results.
Factors at Play
Marriott’s top line in the to-be-reported quarter is likely to be driven by a surge in franchise fees and base management fees. The Zacks Consensus Estimate for franchise fees is likely to increase 8.8% to $517 million, whereas the same for base management fees is expected to climb 2.3% to $307 million. Moreover, for the second quarter of 2019, the company expects comparable system-wide RevPAR to increase in the range of 1-2% in North America (at constant currency). Marriott anticipates the same to rise 2-4% outside North America and approximately 1-3% worldwide.
Rising demand for hotels in international markets and expansion of Marriott’s brands are also likely to provide a boost to the top line in the second quarter. Meanwhile, strong room growth is driving the company’s performance. Marriott is optimistic about its growth potential in the Asia Pacific market.
Marriott efforts to capitalize on global travel trends in China, India and Indonesia also bode well. High population along with a burgeoning middle class is expected to help the company derive profits from operations in these countries.
Earnings in the quarter are likely to decline due to tough year-over-year comparison. In the prior-year quarter, the company registered a gain of 26 cents from the sale of hotels.
Marriott International Price and EPS Surprise
Marriott International price-eps-surprise | Marriott International Quote
What Does the Zacks Model Say?
Our proven model does not show that Marriott is likely to beat earnings estimates in the second quarter. This is because a stock needs to have both — a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) — for this to happen. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Marriott has an Earnings ESP of -1.07% and a Zacks Rank #3, which make surprise prediction difficult. You can see the complete list of today’s Zacks #1 Rank stocks here.
Stocks Poised to Beat Earnings Estimates
Here are some stocks from the Consumer Discretionary sector that investors may consider as our model shows that these have the right combination of elements to come up with an earnings beat in the to-be-reported quarter:
SeaWorld has an Earnings ESP of +11.01% and a Zacks Rank #2. The company is scheduled to report quarterly numbers on Aug 6.
Callaway Golf sports a Zacks Rank #1 and is supposed to report quarterly results on Aug 8. The company’s Earnings ESP is +2.97%.
Wynn Resorts (WYNN - Free Report) has a Zacks Rank #3 and an Earnings ESP of +2.65%.
Today's Best Stocks from Zacks
Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2018, while the S&P 500 gained +15.8%, five of our screens returned +38.0%, +61.3%, +61.6%, +68.1%, and +98.3%.
This outperformance has not just been a recent phenomenon. From 2000 – 2018, while the S&P averaged +4.8% per year, our top strategies averaged up to +56.2% per year.
See their latest picks free >>