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What's in Store for Marriott Vacations' (VAC) Q2 Earnings? - Analyst Blog

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Marriott Vacations Worldwide CorporationVAC is set to report second-quarter 2015 results on Jul 23, before the opening bell.

Last quarter, the Florida-based vacation ownership company posted a positive earnings surprise of 23.19%. In fact, Marriott Vacations beat the earnings estimates in three out of the past four quarters, with an average positive surprise of 11.95%.

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

Factors to Consider

Marriott Vacations, one of the biggest companies in the timeshare industry, is poised to benefit from positive industry trends on the back of competitive advantages. In the first quarter, the company recorded higher contract sales despite flat year-over-year rental revenues. In our view, this trend is likely to continue in the to-be reported quarter as well since it has been able to maintain a steady flow of clients by offering tours to diverse locations and programs with greater outreach.

Volume per guest - sales volume for a given period divided by the number of groups toured - for Marriott Vacations increased since the beginning of 2014. We expect the trend to continue in the to-be-reported quarter as well backed by strong marketing initiatives.

The timeshare industry, as a whole, is extensively marketing-oriented and relies on sales initiatives to bring in new consumers. Therefore, the company's increased marketing expenses might impact margins in the second quarter.

Earnings Whispers

Our proven model does not conclusively show that Marriott Vacations is likely to beat earnings this quarter. That 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 are pegged at 90 cents.

Zacks Rank : Marriott Vacations has a Zacks Rank #3 which when combined with 0.00% ESP makes surprise prediction difficult.

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

Stocks to Consider

Some stocks in the consumer discretionary sector that have both a positive Earnings ESP and a favorable Zacks Rank are:

SeaWorld Entertainment, Inc. SEAS , with an Earnings ESP of +10.00% and a Zacks Rank #2 (Buy).

The Madison Square Garden Company MSG , with an Earnings ESP of +5.13% and a Zacks Rank #1 (Strong Buy).

Penn National Gaming Inc. PENN , with an Earnings ESP of +15.38% and a Zacks Rank #3.

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MADISON SQUARE (MSG): Free Stock Analysis Report

PENN NATL GAMNG (PENN): Free Stock Analysis Report

MARRIOT VAC WW (VAC): Free Stock Analysis Report

SEAWORLD ENTERT (SEAS): 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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