Marriott International Q3 Earning Reports Preview


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The decline is not a surprise anymore?

By: Ahura Chalki

Marriott International (MAR) will publish its third-quarter ending Sep 2020s’ earnings report on November 6, before the US market opens. Based on 9 Zaks analysts’ forecast the consensus EPS forecast for the quarter is $-0.07, which represents a year-over-year change of -104.8%. The reported EPS for the same quarter last year was $1.47. Revenues are expected to be $2.40 billion, down 54.7% from the year-ago quarter.

The massive fall in international travel demand during the first half of 2020 translates into a loss of 440 million international arrivals and about USD 460 billion in export revenues from international tourism. This represents over five times the loss in receipts recorded in 2009 amid the global economic and financial crisis. Overall declined by 65% in the first half of 2020. (1)

As the tourism industry was one of the most hit industries during a pandemic, it is so likely to see negative income and EPS numbers as it is estimated. However, publishing and the estimated number’s ratio going to be much more important as these numbers in line with its quarter 4 outlook, will give a better picture to investors and the market participant of how this industry will be able to get back on its feet.

In the past 4 quarters, Marriott lost 3 estimates and could beat just one Q4 of 2019, however, since many countries lowered the lockdown level during summer holidays, and estimates number is very low, it is also likely to see that they will be able to beat the expectations.

What more must be noted in the report?

When it comes to special situations, always companies thinking about creative ways to increase income, like what some airlines already doing with flying nowhere. It is the same for many other businesses and for the share price in the market, besides earning reports and numbers, next quarter outlook must be in the focus, besides the news like what “Newswire” report of their “wide-ranging strategic partnership with Grab, that will see both companies integrating their offerings to bring the premium hospitality experience into the hands of millions of consumers in Southeast Asia. This is Marriott International’s first extensive integration with a super app platform in Southeast Asia, and Grab’s most comprehensive agreement with a hospitality group to date.” (2)

And finally, stock markets future movement will depend on stimulating package as well, which must wait a bit more, however in any case of the winner, stimulate package will be one of the first musts to do plan of next President, which likely going to lift the Airline and Tourism industry as everyone agrees that they ate most hit and need help, so we can take it as a positive announcement for its share price.

Technical review

While the Zaks Ranking for its’ share is #3 (Hold), it could have more than 50% recovery after free fall of early 2020, however, it is currently trading under a weekly and daily trend line, and shows 100 EMA & 61.8% of its Fibonacci level at $110, as a key resistance level. Positive reports and news will be able to help the market bulls to higher, while between September high of $108 and $110 is a key area and they need to confirm these levels to be able to move higher, however, on the flip side, %38.2 Fibonacci at $87, is the key support. In the short term, before any certain stimulate package, side movement between $90 – $100 and it used to be in Q3 as well, is more likely to see.

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