Marriott (MAR) Up 9.7% Since Last Earnings Report: Can It Continue?

A month has gone by since the last earnings report for Marriott International (MAR). Shares have added about 9.7% 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 Q3 Earnings & Revenues Miss EstimatesMarriott reported third-quarter 2024 results, with adjusted earnings and revenues missing the Zacks Consensus Estimate. The top and bottom lines increased on a year-over-year basis.During the quarter, the company reported a solid increase in global travel demand, driving growth in international markets and steady performance in the United States and Canada. The company reported a rise in group bookings. Business transient demand increased and leisure transient revenue per available room (RevPAR) remained above pre-pandemic levels. Marriott’s portfolio expansion also gained traction, adding over 95,000 rooms this year through conversions and international deals. To support its expanding global footprint, MAR introduced an efficiency initiative to generate up to $90 million in annual cost savings by 2025.MAR’s Q3 Earnings & Revenue DiscussionMarriott’s adjusted EPS of $2.26 missed the Zacks Consensus Estimate of $2.31. It reported adjusted earnings of $2.11 per share in the prior-year quarter. Quarterly revenues of $6.26 billion missed the consensus mark of $6.28 billion. The top line moved up 5.5% on a year-over-year basis.Revenues from Base management and Franchise fees were $312 million and $812 million, up 2% and 9% year over year, respectively. Increased RevPAR, residential and co-branded credit card fees and unit growth backed this uptick. We estimated the metrics to be $319.5 million and $815.4 million, respectively.Incentive management fees were $159 million, reflecting a rise of 11.2% from $143 million reported in the prior-year quarter.RevPAR & MarginsRevPAR for worldwide comparable system-wide properties rose 3% (in constant dollars) year over year. The upside was backed by a 2.5% increase in average daily rate (“ADR”) and a 0.3% increase in occupancy, year over year.Comparable system-wide RevPAR in the Asia Pacific (excluding China) increased 9.2% (in constant dollars) year over year. Occupancy moved up 3.1% year over year, while ADR rose 4.6% from the 2023 level. Comparable system-wide RevPAR in Greater China declined 7.9% year over year.On a constant-dollar basis, international comparable system-wide RevPAR increased 5.4% year over year. Occupancy and ADR gained 1.5% and 3.2% year over year, respectively. Comparable system-wide RevPAR in Europe gained 9.5% year over year. RevPAR in the Caribbean & Latin America and Middle East & Africa rose 6.7% and 8%, respectively, from 2023 levels.Total expenses increased 10% year over year to $5.31 billion, owing to a rise in reimbursed expenses. Our estimate was pegged at $5.1 billion.Adjusted EBITDA amounted to $1.23 billion, compared with $1.14 billion reported in the prior-year quarter. We predicted the metric to be $1.25 billion.Balance SheetAt the third-quarter end, Marriott's total debt totaled $13.6 billion, compared with $13.1 reported in the prior quarter. Cash and cash equivalents, as of Sept. 30, 2024, were $0.4 billion compared with $0.3 billion as of 2023-end.Year to date (through Oct. 31, 2024), the company repurchased 14.2 million shares worth $3.4 billion.Unit DevelopmentsAt the end of the third quarter, Marriott's worldwide development pipeline totaled 3,802 hotels, with more than 585,000 rooms. As of the quarter's end, about 1,320 properties with more than 220,000 rooms were under construction.Marriott’s Q4 & 2024 OutlookFor the fourth quarter, management anticipates gross fee revenues in the range of $1.29-$1.31 billion. Adjusted EBITDA is expected between $1.24 billion and $1.27 billion. MAR estimates fourth-quarter EPS to be between $2.31 and $2.39.The company projects worldwide system-wide RevPAR to increase 3-4% year over year in 2024.For 2024, Marriott reduced its gross fee revenue expectations to $5.13-$5.15 billion compared with the prior expected range of $5.13-$5.18 billion. General and administrative expenses are now projected in the range of $1.05-$1.06 billion (priorly expected between $1.02 billion and $1.03 billion).Adjusted EBITDA is now expected between $4.93 billion and $4.96 billion compared with the previous expectation of $4.95-$5.2 billion. The company now envisions 2024 EPS in the band of $9.19-$9.27, down from the prior expectation of $9.23-$9.40.How Have Estimates Been Moving Since Then?It turns out, estimates revision have trended downward during the past month.VGM ScoresAt 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.OutlookEstimates 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 PlayerMarriott is part of the Zacks Hotels and Motels industry. Over the past month, Hyatt Hotels (H), a stock from the same industry, has gained 10.4%. The company reported its results for the quarter ended September 2024 more than a month ago.Hyatt Hotels reported revenues of $1.63 billion in the last reported quarter, representing a year-over-year change of +0.4%. EPS of $0.94 for the same period compares with $0.70 a year ago.Hyatt Hotels is expected to post earnings of $0.74 per share for the current quarter, representing a year-over-year change of +15.6%. Over the last 30 days, the Zacks Consensus Estimate has changed -10.2%.The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Hyatt Hotels. Also, the stock has a VGM Score of F.Zacks' Research Chief Names "Stock Most Likely to Double"Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. Of those 5, Director of Research Sheraz Mian highlights the one stock set to climb highest.This top pick is among the most innovative financial firms. With a fast-growing customer base (already 50+ million) and a diverse set of cutting edge solutions, this stock is poised for big gains. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.Free: See Our Top Stock And 4 Runners UpWant the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Marriott International, Inc. (MAR): Free Stock Analysis Report Hyatt Hotels Corporation (H): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks