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Monday, July 28, 2014

Marriott International Inc ( $MAR ) will release earnings #Buy or #Sell ? #stocksplit ?

by N. Kross

Marriott International Inc (MAR) will release earnings for the second quarter of its fiscal year 2014 (2QFY14), tomorrow, after markets close. The leading hotelier is expected to report an increase in revenues and profitability.

Marriott managed to beat earnings estimates in three of the last four quarters but fell shy of revenue estimates in two quarters. The hotel chain performed well in its latest quarterly results; sales, at $3.29 billion, were in line with analysts’ estimates and increased 5% year-over-year (YoY) due to increased demand in North America. Net Income also grew 25.6% and totaled $172 million, or $0.54 per share, compared to the same quarter last year. This exceeded analysts’ predicted earnings of $0.51.

The company also revised its full-year earnings guidance for 2014. Earnings are now predicted to fall within a range of $2.39–2.59 – implying a 20-27% increase over the previous year – whereas the earlier guidance was set at $2.45. Management also pushed its revenue forecast for the ongoing year to a little over $13 billion, reflecting a growth of 10% over 2013. Analysts, on the other hand, predict revenues of $13.67 billion, while earnings are expected to equal $2.47 for the year.

In the second quarter (ended June 30), analysts predict the top line to grow 7.7% and reach $3.51 billion, compared to $3.29 billion in the second quarter last year. Continuing with the trend observed in 1QFY14, earnings are expected to increase 17.5% over last year, to come in at $0.67.

The company, which operates renowned hotel chains including Marriott and The Ritz-Carlton, is now focused on expanding its properties worldwide, especially in emerging markets. It also plans to introduce new hotels in the Middle East and Africa and is spending $3 billion on developing 45 properties in Africa alone, in countries like Nigeria and Kenya. However, given the troubled political conditions and terrorism in these areas, Marriot may have exposed itself to considerable risk. It also plans to renovate its hotels in developed countries, where the market seems to have slowed down. The company projects a 6% addition in rooms worldwide for the ongoing year. It has also announced the launch of new spas under the JW banner, which will commence operations in September this year.

Of the 29 analysts who cover the stock, 16 have rated it a Buy, while 10 recommend Hold. Analysts have a consensus twelve-month target price of $63.94 for the stock, which it is lower than its last closing price of $66.37. A day earlier, the stock had reached an all-time high of $67.12

Mad Money Fund has a buy rating - Target Price is $70.00 a share by Sept. 1 2014 , Look for 2 for 1 stock split in early 2015 ...........

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