Bethesda, Maryland-based hospitality company
Marriott International, Inc.
) is set to report third-quarter 2013 results after the market
closes on Oct 30.
In the last four quarters, it delivered a positive earnings
surprise of 5.57%. Let's see how things are shaping up for the
company prior to the announcement.
Factors to Consider
Marriott is one of the world's leading hospitality companies
that manages and franchises an extensive portfolio of lodging
facilities of various sizes and scale under 17 brands. The
company has a solid development pipeline which should benefit it
over the long term.
However, the hotel industry is cyclical in nature and is
highly dependent on the overall health of the U.S. and the global
economy. Management expects the budget sequestration, effective
since Mar 1, 2013, to hamper the company's business momentum in
North America to some extent.
Moreover, we believe that sluggish group booking demand will
hurt the company's financials at the current level. The weak
economic conditions in Europe and the slowdown in China also
added to the woes.
Our proven model does not conclusively show that Marriott is
likely to beat the Zacks Consensus Estimate in the upcoming
quarter. To beat the estimate, a stock needs to have both a
and a Zacks Rank #1, 2 or 3. However, this is not the case here
due to the following reasons:
Negative Zacks ESP:
The company's Most Accurate estimate stands at 44 cents, while
the Zacks Consensus Estimate is pegged slightly higher at 45
cents. This results in an Earnings ESP of -2.22%.
Marriott's Zacks Rank #2 (Buy) has little effect on the
predictive power of ESP because the Zacks Rank #2 when combined
with a -2.22% ESP makes surprise prediction difficult.
We caution against stocks with Zacks Rank #4 and 5 (Sell-rated
stocks) going into earnings announcement, especially when the
company is seeing negative estimate revisions momentum.
Other Stocks to Consider
Other stocks from the broader consumer discretionary sector
that have both a positive earnings ESP and a favorable Zacks Rank
Melco Crown Entertainment Limited
), with Earnings ESP of +6.45% and a Zacks Rank #1 (Strong
Bally Technologies, Inc.
), with Earnings ESP of +1.11% and a Zacks Rank #3 (Hold).
Penn National Gaming Inc.
), with Earnings ESP of +2.38% and a Zacks Rank #3 (Hold).
BALLY TECH INC (BYI): Free Stock Analysis
MARRIOTT INTL-A (MAR): Free Stock Analysis
MELCO CROWN ENT (MPEL): Free Stock Analysis
PENN NATL GAMNG (PENN): Free Stock Analysis
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