Marriott Tops Earnings Estimates, Benefits From Strong Travel Demand
2022.08.03 00:34
Marriott (MAR) Tops Earnings Estimates, Benefits From Strong Travel Demand
By Sam Boughedda
Marriott International Inc (NASDAQ:MAR) topped analyst estimates when it reported second-quarter earnings before the bell Tuesday, benefitting from occupancy levels and higher rates as demand rises, and longer hotel stays.
Marriott posted earnings of $1.80 per share, $0.24 better than the analyst estimate of $1.56, with revenue coming in at $5.34 billion versus the consensus estimate of $4.83 billion.
With Covid travel restrictions mostly now in the past, travel demand has soared. Marriott reaped the benefits with travelers spending more on hotels, plane tickets and car rentals.
“We have not seen signs of leisure travel abating, with leisure roomnights in the region more than 15 percent higher than second quarter 2019, and ADR meaningfully outpacing pre-pandemic levels. Europe also experienced notably strong RevPAR recovery, in large part due to the return of international visitors, with June RevPAR exceeding 2019,” said Anthony Capuano, Chief Executive Officer of Marriott.
Following the report, a Stifel analyst maintained a Hold rating on the stock but raised the firm’s price target to $161 per share from $150.
“Marriott International reported 2Q adjusted EPS of $1.80, $0.25 above our estimate and $0.23 above the Street. Variance to our estimate was driven by higher franchise and incentive fees, and higher owned profit. Adjusted EBITDA came in at $1,019 million, compared to the Street at $921.8 million,” said the analyst.
“MAR provided guidance for the remainder of 2022 and 3Q specifically. For FY22, MAR expects worldwide comparable system-wide RevPAR down -6% to -3%, with North America down 3% to flat and international down -13% to -10%. Given these assumptions, MAR expects adjusted EBITDA of $3,682-$3,792 and adjusted EPS in a range of $6.33-$6.59. In terms of 3Q22 guidance, the company sees comparable system-wide RevPAR worldwide flat to +3%, with North America up between 1% and 4% and International down -3% to flat,” he added.
Marriott shares fell 0.9% Tuesday.
