Marriott International Inc: Q4 2022 Earnings Preview

Marriott International Inc. is a US based company founded in 1927, best known for the operation and franchise of hotels, residential and timeshare properties. To date, it has a  portfolio of nearly 8300 properties under 30 leading brands spanning 138 countries and territories (some of the most famous categories include the Classic Luxury (Ritz-Carlton, St. Regis, JW Marriott), Distinctive Luxury (Ritz-Carlton Reserve, The Luxury Collection, W Hotels), Premium (Sheraton, Marriott Vacation Club, Delta Hotels), Distinctive Premium (Le Meridien, Westin, Renaissance Hotels, Gaylord Hotels), Classic Select (Courtyard Hotels, Four Points, SpringHill Suites, Protea Hotels, Fairfield Inn & Suites), Distinctive Select (AC Hotels, Aloft Hotels, Moxy Hotels), Classic Longer Stays (Marriott Executive Apartments, Residence Inn, TownePlace Suites) and Distinctive Longer Stays (Element, Homes & Villas by Marriott International)) .

Recognized as one of the World’s Most Admired Companies for the 23rd consecutive year by the Fortune Magazine (ranked 16th across all companies and 1st in the category of Hotels, Casinos and Resorts), investors will be watching the company’s Q4 2022 earnings result, which is due to be announced on 14th February (Tuesday), at pre-market open.

Fig.1: Reported Sales of Marriott International Inc. versus Analyst Forecast. Source: CNN Business

Sales of Marriott International last year generally performed on par with market expectations. In the previous quarter, the company reported its revenue per available room (RevPAR) rose above 2019 levels for the first time since the pandemic began, up nearly +2%. Driven by robust leisure demand, its global hotel occupancy rose to 69%, while average daily rate (ADR) outpaced 2019 by +10%. The company also saw a significant jump in ADR for group bookings, up +17% compared to the same period in 2019. In general, the management expects continued demand for leisure and business travel in the near term boosted by increasing cross-border travel, but is also wary of a possible global recession as the hotel industry is still largely driven by the economic cycle.

Fig.2: Revenue of Marriott International Worldwide. Source: Statista

Consensus estimates for sales of Marriott International in Q4 2022 remain flat, at $5.4B. If the expected figure is met, this would bring the total sales of the company for the year 2022 to $20.2B, up over +45% from 2021.

Fig.3: Reported EPS of Marriott International Inc. versus Analyst Forecast. Source: CNN Business

On the other hand, EPS is estimated at $1.83, up +8.28% from the previous quarter, and up nearly +41% from the same period last year. Consensus estimate for EPS in year 2022 stood at $6.55, doubled from the previous year.

Technical Analysis:

The #Marriott share price has been riding on a strong bullish trend since early January this year after gaining support above $146 (FR 23.6% extended from April high ($195.10) to June low ($130.98) in 2022). Gains in January were over 21%, forming a new June 2022 high. The price is consolidating between $170.60 (S1) to $175.70 (R1) this month. Near term direction could be identified with a valid breakout from either of these levels. In this case, breaking above R1 may suggest bullish continuation, towards the next resistance zone at $181.40-$184.40, followed by the April 2022 high at $195.10. On the other hand, a close below S1 may suggest a correction wave towards the next support at $163, followed by dynamic support 100-day SMA which lies near to $155.

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Larince Zhang

Market Analysis

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