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Peek into Hotel Stocks' Q1 Earnings on May 8: MAR, BEL, PLYA

Zacks Equity Research

We have almost reached the last leg of the first-quarter earnings season, with nearly 71.6% or 358 S&P 500 members having released their earnings reports as of May 3, 2017. Total earnings for these 358 members have gone up 12.9% on 7.9% higher revenues.

Let’s take a look at how the widely diversified Consumer Discretionary sector has fared this time around.

Per the latest Earnings Outlook, 57.1% of the Consumer Discretionary companies in the S&P 500 index have already reported their results as of May 3. The growth rate for earnings and revenues is a solid 20.7% and 17.3%, respectively. Moreover, the beat ratio of 80.0% and 45.0% for earnings and revenues, respectively, is also noteworthy.

Hotel Stocks in Focus

Turning our focus on the hotel stocks from the sector, we note that the earnings picture so far has been moderately encouraging.

Though industry-wide headwinds continue to weigh on sentiment, improving economic indicators, solid lodging fundamentals, a steady rise in business and leisure travel as well as higher transaction, volumes is boosting results.

Among the hotel stocks that have already reported, Hilton Worldwide Holdings Inc. HLT and Hyatt Hotels Corporation H reported better-than-expected first-quarter 2017 results. Meanwhile, Wyndham Worldwide Corporation WYN posted mixed results for the quarter. While its earnings topped the Zacks Consensus Estimate, revenues marginally missed the same.

Three hotel companies are set to report their first-quarter 2017 numbers on May 8. Will these companies manage to put up a decent performance? Let’s take a look at what might be in store for them this quarter:

Marriott International, Inc. MAR registered a positive earnings surprise of 2.41% in the previous quarter. In fact, the company’s earnings surpassed the Zacks Consensus Estimate in each of the last four quarters, with an average beat of 3.05%

Marriott International Price and EPS Surprise

 

Marriott International Price and EPS Surprise | Marriott International Quote

Notably, our proven model shows that an earnings beat is likely for Marriott this time around. This is because the company has the right combination of the two key ingredients – a Zacks Rank #3 (Hold) or better and a positive Earnings ESP – to increase its odds of an earnings surprise. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

For the quarter, the company has an Earnings ESP of +1.11% and a Zacks Rank #3. The Zacks Consensus Estimate for the quarter’s bottom line is pegged at 90 cents.

Marriott’s earnings have been surpassing the Zacks Consensus Estimate consistently over the past 11 quarters, driven by growth in revenues and strong margins. We expect the trend to continue in the to-be-reported quarter as well. Particularly, Marriott’s increased scale and a robust development pipeline post Starwood purchase is likely to bolster the top line in the first quarter. However, lingering global uncertainties, competition in domestic market, along with negative currency translation might somewhat dent top-line growth (read more: Is a Beat in the Cards for Marriott in Q1 Earnings?).

Belmond Ltd. BEL posted a negative earnings surprise of 83.33% in the last quarter. In addition, it lagged estimates in two of the trailing four quarters, bringing the average negative surprise to 12.20%.

Belmond Ltd. Price and EPS Surprise

 

Belmond Ltd. Price and EPS Surprise | Belmond Ltd. Quote

For the quarter, the company has an Earnings ESP of 0.00%, which makes surprise prediction difficult even though the company has a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Notably, the Zacks Consensus Estimate for the quarter’s bottom line is pegged at a loss of 11 cents.

Lastly, Playa Hotels & Resorts N.V. PLYA is anticipated to beat expectations in this quarter as the company has an Earnings ESP of +9.68% and a Zacks Rank #3. The Zacks Consensus Estimate for the quarter’s bottom line is pegged at 31 cents.

Stay tuned! Check back on our full write-up on earnings releases of these stocks.

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Wyndham Worldwide Corp (WYN): Free Stock Analysis Report
 
Marriott International (MAR): Free Stock Analysis Report
 
Hyatt Hotels Corporation (H): Free Stock Analysis Report
 
Hilton Worldwide Holdings Inc. (HLT): Free Stock Analysis Report
 
Belmond Ltd. (BEL): Free Stock Analysis Report
 
Playa Hotels & Resorts N.V. (PLYA): Free Stock Analysis Report
 
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