BRAZIL - 03/2021/24: In this photo, a Marriott Vacations Worldwide Corporation logo seen ... posted at a smartphone (Photo illustration by Rafael Henrique / SOPA Images / LightRocket via Images) SOPA Images / LightRocket via Images
Aided by advances in mass vaccination, declining numbers of new cases and increased discretionary spending, actions by hotels and companiesThe airlines have seen a strong surge in recent months, including interestingly that the stock has surpassed pre-Covid levels propelled by expectations of a strong recovery in contract sales over the course of the year. second half of the year. As a global leader in vacations, Marriott Vacations offers vacation rentals and related products from seven brands, including Marriott Vacation Club, Sheraton Vacation Club, Hyatt Residence Club, under an exclusive license agreement. Despite seeing a 27% sequential growth in contract sales in the first quarter, Trefis believes the share price is tight given the current high P / S multiple. We highlight historical trends in Marriott Vacations revenue, earnings and share price in interactive dashboard analysis,
Marriott's finance and operations measures during the pandemic
The company's revenue fell 32% (year-on-year) from $ 4.2 billion in 2019 to $ 2.8 billion in 2020, the measures restriction resulting in a sharp drop in holiday accommodation. Notably, total contract sales fell 57%, from $ 1.5 billion in 2019 to $ 0.7 billion in 2020. Contract sales refer to the value of all vacation units sold in under various contracts for which the company has received a deposit. In the first quarter of 2021, the company's revenues improved only 1.6% (q / q) despite a 27% increase in contract sales, with growth in other segments remaining slow. Thus, we believe that the stock's current high valuation multiple (P / S) of 1.6 versus 0.8 in 2019 and 0.7 in 2018 looks stretched, indicating a high probability of correction. Most importantly, the 226 mmillion dollars in contract sales in Q1 2021 are 36% lower than those observed in Q1 2019.
How did the Marriott Vacations action fare compared to at the S&P 500?
Marriott Vacations stock has declined from levels of around $ 123 in February 2020 (pre-crisis peak) to levels around $ 48 in March 2020 (as markets bottomed out), implying that VAC stock has lost 60% from its approximate pre-crisis peak. With the easing of restrictions, the stock has more than doubled to $ 160, but the prevalence of several strains of coronavirus around the world is a concern for the travel industry. Thus, the stock is likely to observe headwinds in the short term. In compBecause of this, the S&P 500 index initially fell 34% as Covid-19 cases accelerated outside China and gained 86% after the Fed's intervention coupled with the launch of Pfizer's vaccine .
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