Earnings Preview: Marriott International

| About: Marriott International, (MAR)

Marriott International, Inc. (MAR) operates, franchises, and licenses hotels and corporate housing properties worldwide. The company operates and franchises hotels and resorts under various brands, including Marriott Hotels & Resorts, JW Marriott, Renaissance Hotels, Autograph Collection, Courtyard, Fairfield Inn & Suites, SpringHill Suites, Residence Inn, TownePlace Suites, The Ritz-Carlton, Bulgari Hotels & Resorts, and EDITION, as well as AC Hotels by Marriott.

It is scheduled to report its Q2 2012 results on July 11, 2012, after the bell. In this article I will recap the historical results of the company, latest EPS estimates vs. surprises, latest developments and closest competitors' development.

Technical Overview


The stock has a market capitalization of $12.99B and is currently trading at $39.25 with a 52 week range of $25.49 - $40.45. The stock performance year to date: 35.39%. It is currently trading above 20, 50 and 200 SMA.

Key Metrics

  • Trailing P/E: 68.14
  • Forward P/E: 19.43
  • Price/Sales: 4.04
  • Price/Book: N/A
  • PEG Ratio: 3.64
  • Total Debt: 2.53B
  • Annual dividend yield: 1.10%
  • Return on Equity: 74.72%
  • Return on Assets: 6.98%

Recent EPS Actuals vs. Estimates

The company has met or beaten analysts' estimates in the last quarters. In the last quarter it reported $0.30 EPS, beating analyst estimates of $0.29.

The consensus EPS is $0.42 based on 24 analysts' estimates, up from $0.37 a year ago. Revenue estimates are $2.84B, down from $2.97B a year ago. The median target price by analysts for the stock is $43.00.

Average recommendation: Overweight

Source: Marketwatch

Analyst Upgrades and Downgrades

  • On May 29, 2012, MLV & Co initiated Hold rating for the company.
  • On April 25, 2012, the company was upgraded from Hold to Buy at Argus.
  • On March 7, 2012, the company was upgraded from Neutral to Buy at MKM Partners.
  • On February 17, 2012, Barclays Capital reiterated Equal Weight rating for the company.

Latest Developments

  • On June 19, 2012, Marriott International, Inc. announced that assuming 6% to 8% compound growth in worldwide systemwide Revenue per Available Room (RevPAR) for 2012 through 2014, diluted earnings per share (EPS) could reach $2.45 to $2.85 in fiscal 2014.
  • On May 4, 2012, Marriott International, Inc. announced that its Board of Directors approved a 30% increase in the company's quarterly cash dividend from $0.10 to $0.13 per share of common stock.
  • On April 27, 2012, Marriott International, Inc. announced the opening of the Renaissance Barcelona Hotel, located just steps away from the Paseo de Gracia, the shopping and architectural district of Barcelona.
  • On April 18, 2012, Marriott International, Inc. announced that for the second quarter of 2012, it expects comparable systemwide REVPAR on a constant dollar basis to increase 6% to 8%. For fiscal 2012, it expects operating income in the range of $895 million to $950 million, EBITDA is expected to total $1.105 billion to $1.160 billion, earnings per share in the range of $1.58 to $1.69 and expects comparable systemwide REVPAR on a constant dollar basis to increase 6% to 8%.
  • On April 16, 2012, Marriott International, Inc. and Oakwood Worldwide, a privately held company announced that they have signed an agreement for Marriott to sell its ExecuStay corporate and temporary apartment housing business to Oakwood, which is global provider of corporate housing and serviced apartments, with locations in more than 50 countries.
  • On February 15, 2012, Marriott International, Inc. announcedthat for the first quarter of 2012, it expects operating income in the range of $160 million to $180 million and earnings per share in the range of $0.26 to $0.30. For the first quarter, the Company also expects comparable systemwide REVPAR on a constant dollar basis will increase 5% to 6% in North America, 4% to 5% outside North America and 5% to 6% worldwide.
  • On February 10, 2012, Marriott International, Inc. announcedthat its Board of Directors declared a quarterly cash dividend of $0.10 per share of common stock. The dividend is payable on March 30, 2012 to shareholders of record on February 24, 2012.
  • On February 3, 2012, Marriott International, Inc. announced that it is scheduled to open the 171-room Courtyard by Marriott and 157-suite Residence Inn by Marriott in Calgary, Alberta, Canada in early February, 2012.

Competitors

Marriott International, Inc. operates in Lodging industry. The company could be compared to Choice Hotels International Inc. (CHH), Hyatt Hotels Corporation (H), Starwood Hotels & Resorts Worldwide Inc. (HOT), and Intercontinental Hotels Group plc (IHG). Below is the table comparison of the most important ratios between these companies and the industry.

Below is the chart comparison with the stock price changes as a percentage for the selected companies and S&P 500 index for the last one year period.

MAR ChartClick to enlarge

MAR data by YCharts

Competitors' Latest Development

  • On June 22, 2012, Choice Hotels International, Inc. announced the pricing of its senior notes in an aggregate principal amount of $400 million, in an underwritten, registered public offering.
  • On June 19, 2012, Choice Hotels International, Inc. announced its intention to offer $400 million aggregate principal amount of senior notes due 2022. The notes will be unsecured, unsubordinated obligations of the Company and will be guaranteed by certain U.S. subsidiaries of the Company.
  • On May 3, 2012, Hyatt Hotels Corp announced that Hyatt will realign corporate and regional operations to enhance organizational effectiveness and adaptability. As part of the realignment, Hyatt will establish three operating regions that will be supported by a newly formed Global Operations Center.
  • On April 26, 2012, Choice Hotels International, Inc. announced that for the second quarter of 2012, it expects EPS to be $0.51 and RevPAR to increase approximately 7%. For fiscal 2012, it expects EPS to be in the range of$2.03-$2.08, EBITDA to be in the range of $200-$203 million and RevPAR to increase between approximately 5% and 7%. According to I/B/E/S estimates, analysts were expecting the Company to report EPS of $0.59 for the second quarter of 2012; EPS of $2.02 and EBITDA of $202 million for fiscal 2012.
  • On April 26, 2012, Starwood Hotels & Resorts Worldwide, Inc announced that for fiscal 2012, it expects adjusted EBITDA is expected to be approximately $1.070-$1.100 billion, including Bal Harbour, earnings per share before special items is expected to be approximately $2.35-$2.46. For the second quarter of 2012, it expects adjusted EBITDA to be approximately $275-$285 million and including Bal Harbour, EPS is expected to be approximately $0.58-$0.62. According to I/B/E/S Estimates, analysts were expecting the Company to report EBITDA of $1.153 billion and EPS of $2.31 for fiscal 2012; EBITDA of $299 million and EPS of $0.61 for the second quarter of 2012.
  • On April 9, 2012, Starwood Hotels & Resorts Worldwide, Inc announced that it has completed the sale of the 275-room Atlanta Perimeter Hotel & Suites to RockBridge Partners, a division of RockBridge.
  • On March 7, 2012, Design Hotels AG announced that on February 24, 2012, it was informed by Starwood Hotels & Resorts Worldwide, Inc (Starwood), that Starwood acquired a majority stake in Design Hotels AG. Financial details were not disclosed.
  • On March 6, 2012, Starwood Hotels & Resorts Worldwide, Inc announced that it will open 25 new hotels in Europe over the next four years. The Company this year, has opened two new hotels in Europe with a W hotel in Paris and a Le Méridien hotel in Istanbul.
  • On February 17, 2012, Choice Hotels International, Inc. announced that for fiscal 2012, it expects diluted earnings per share of $1.99-$2.04 and for the first quarter of 2012, it expects diluted EPS of at least $0.30. According to I/B/E/S estimates, analysts were expecting the Company to report EPS of $2.00 for fiscal 2012; EPS of $0.31 for the first quarter of 2012.

Sources: Yahoo Finance, Google Finance, Marketwatch, Finviz, Reuters.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.