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Marriott Vacations (VAC) Q4 Earnings: What's in the Cards?

Marriott Vacations Worldwide Corp.VAC is scheduled to report fourth-quarter and full-year 2016 numbers on Feb 23, before the opening bell.

Last quarter, this Florida-based vacation ownership company posted a negative earnings surprise of 20.00%. Notably, the company has missed earnings estimates in two of the past four quarters, with an average negative surprise of 1.43%.

Marriot Vacations Worldwide Corporation Price and EPS Surprise

Marriot Vacations Worldwide Corporation Price and EPS Surprise | Marriot Vacations Worldwide Corporation Quote

Let's see how things are shaping up for this announcement.

Factors to Consider

Marriott Vacations, one of the major players in the timeshare industry, is poised to benefit from positive timeshare industry trends. The company has been able to maintain a steady flow of clients by offering tours to diverse locations and programs with greater outreach.

Marriott Vacations expects to drive contract sales and rental revenues in the fourth quarter via its two major growth initiatives. The first being tours from new marketing programs, namely call transfer and universal encore programs and secondly, by additional sales distributions at its six new locations.

Moreover, management believes that headwinds faced at the company's Latin America channels over the past few quarters, would largely subside in the fourth quarter.

Meanwhile, adjusted EBITDA (Earnings before Interest, Tax, Depreciation and Amortization) is expected to grow at least 30% in the to-be-reported quarter. Notably, the company's development business, resort management and other services, the financing business, lower G&A costs and an expected outperformance in the company's rental business are expected to be the primary drivers of this growth.

Nevertheless, as the timeshare industry is extensively marketing-oriented and relies heavily on sales initiatives to attract customers, the company's increased marketing expenses might pressurize fourth quarter margins.

Earnings Whispers

Our proven model does not conclusively show that Marriott Vacations is likely to beat earnings this 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. That is not the case here, as you will see below.

Zacks ESP: Earnings ESP for Marriott Vacations is 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate stand at $1.77. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter .

Zacks Rank: Marriott Vacations currently carries a Zacks Rank #3, which when combined with an ESP of 0.00% makes surprise prediction difficult.

Note that we caution against stocks with a Zacks Rank #4 or 5 (Sell-rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions momentum.

Stocks to Consider

Here are some companies in the broader consumer discretionary sector to consider as our model shows that they have the right combination of elements to post an earnings beat this quarter:

Extended Stay America, Inc. STAY has an Earnings ESP of +21.43% and a Zacks Rank #2. You can see the complete list of today's Zacks #1 Rank stocks here .

Pinnacle Entertainment, Inc. PNK has an Earnings ESP of +57.14% and a Zacks Rank #3.

Wolverine World Wide, Inc. WWW has an Earnings ESP of +3.23% and a Zacks Rank #3.

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Pinnacle Entertainment, Inc. (PNK): Free Stock Analysis Report

Wolverine World Wide, Inc. (WWW): Free Stock Analysis Report

Marriot Vacations Worldwide Corporation (VAC): Free Stock Analysis Report

Extended Stay America, Inc. (STAY): Free Stock Analysis Report

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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.


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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