Marriott (MAR) to Report Q3 Earnings: What's in the Cards?

Marriott International, Inc. MAR is scheduled to report third-quarter 2019 results on Nov 4, after the closing bell. In the last reported quarter, the company’s earnings came in line with the Zacks Consensus Estimate. Additionally, it has an average trailing four-quarter positive earnings surprise of 9.5%.

Q3 Expectations

The Zacks Consensus Estimate for third-quarter earnings is pegged at $1.49, lower than $1.70 reported in the prior-year quarter. Over the past 30 days, the company’s earnings estimates have witnessed downward revision by a penny. For revenues, the consensus mark is pegged at $5,157 million, suggesting growth of 2.1% from the year-ago quarter reported figure.

Factors at Play

Increase in franchise fees and base management fees are likely to have positively impacted Marriott’s top line in the to-be-reported quarter. The Zacks Consensus Estimate for franchise fees stands at $530 million, indicating an improvement of 5.6% from the year-ago quarter, while the same for base management fees is pegged at $281 million, suggesting growth of 0.7%.

Moreover, increasing demand for hotels in international markets, strong room growth and expansion of Marriott’s brands are likely to get reflected in the company’s third-quarter results. Robust RevPAR growth in and outside North America is likely to have driven the third-quarter top line. The company expects third-quarter comparable system-wide RevPAR to increase in the range of 1-2% in North America (in constant currency). Marriott anticipates the same metric to rise 2-3% outside North America and approximately 1-2% worldwide.

Marriott efforts to capitalize on global travel trends in China, India and Indonesia also bode well. High population and a burgeoning middle class is expected to have benefited the company in generating profits in the third quarter.

Earnings in the quarter are likely to decline thanks 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 and EPS Surprise

Marriott International price-eps-surprise | Marriott International Quote

What Does the Zacks Model Say

Our proven model does not conclusively predict an earnings beat for Marriott this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that's not the case here.  

You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Marriott has a Zacks Rank #3 and an Earnings ESP of -0.25%.  

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:

Melco Resorts & Entertainment Limited MLCO has a Zacks Rank #3 and an Earnings ESP of +2.44%. You can see the complete list of today’s Zacks #1 Rank stocks here.

Vail Resorts, Inc. MTN has a Zacks Rank #3 and an Earnings ESP of +0.42%.

Lululemon Athletica Inc. LULU has a Zacks Rank #2 and an Earnings ESP of +4.14%.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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