Marriot International Inc. (NASDAQ: MAR) released its Q4 2021 earnings and revenue report on Tuesday, February 15, 2022, after market close. The company topped both earnings and revenue estimates for the period under review.
What to look for: The company performed well during the quarter as the effect of the Omicron variants seems to have been minimal than many anticipated in late 2021. However, executives indicated that increasingly relaxed health restrictions and the possibility of flare-ups made it challenging to predict long-term when the company will return to pre-pandemic levels. CEO Tony Capuano stated that the Omicron variant caused a temporary setback in demand, but new bookings have returned to pre-Omicron levels, and the hotel giant expects considerable recovery this year.
Earnings: Stockearning’s Estimated EPS for Q4 2021 was $0.99, but the company reported EPS of $1.42 compared to $0.5 per share a year ago. The company reported a net income of $468 million relative to a net loss of $164 million a year ago. Excluding items, the company had adjusted earnings of $430 million or $1.3 per share. For the full year, the company has a net income of $1.1 billion or $3.34 per share, returning to a profit from a year earlier. Historical EPS Performance shows that the company in the past 12 quarters has topped estimates nine times (75%) and missed thrice (25%).
Revenue: Revenue in the fourth quarter was $4.45 billion, exceeding revenue of $3.86 billion predicted by analysts. For the whole year, the company reported 31% YoY growth in revenue to $13.86 billion but short of the $20.96 billion reported in 2019.
Stock Movement: MAR shares have gained 7% since the company released its third-quarter earnings. Interestingly, the company’s shares have been UP 24 times out of the past 47 quarters. So, the historical price reaction suggests a 51% probability of the share price going UP following the fiscal Q4 2021 earnings release. According to the Stockearning algorithm, the predicted first-day move is +/-2%, while the predicted move on the seventh day is +/-4%.
What analysts are saying: Stifel analyst Simon Yamak raised his price target on MAR from $155 to $175 but maintained a Hold rating on the shares. Yamak noted that Marriott announced adjusted Earnings Per Share of $1.30 in the fourth quarter, which was 32 cents more than his projection and 30 cents higher than Wall Street. Higher incentive fees, cheaper SG&A, and a lower tax rate, according to Yarmak, drove the difference from his projection. He also points out that adjusted EBITDA was $741 million, compared to $699 million on Wall Street.
Cowen analyst Kevin Kopelman raised his price target on the stock from $170 to $180 and maintained a Buy rating on MAR. Kopelman stated that the company is on track for improved Q4 2021 RevPAR despite the effects of the Omicron variant. The analyst said that his target price change reflects increasing overall optimism in the recovery.
Loop Capital analyst Daniel Adam slashed his price target on MAR from $165 to $163 but maintained a Hold rating in the stock after assuming coverage of the name. Adam is "generally optimistic" about global accommodation trends in 2022 but does not expect a rebound to 2019 RevPAR levels until at least 2023. In addition, the analyst told investors in a research note that he expects "bumps along the way," such as the recent omicron variant, which would likely have a detrimental effect on near-term travel and accommodation demand.
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