Weak hotel demand in August and September forced La Quinta to lower its revenue per available room growth expectations to between 3.5% and 4.5%, from its previous growth expectations of 4.5% to 5.5%.
The company also said its expects pro forma EBITDA to now be between $393 million and $400 million, down from its previous view between $398 million and $404 million.
Marriott shares are falling on heavy volume as 5.8 million shares were traded today versus its daily average of 2.3 million shares.
Separately, TheStreet Ratings team rates MARRIOTT INTL INC as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:
"We rate MARRIOTT INTL INC (MAR) a BUY. This is driven by a number of strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, impressive record of earnings per share growth, compelling growth in net income, good cash flow from operations and solid stock price performance. We feel its strengths outweigh the fact that the company shows low profit margins."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- MAR's revenue growth has slightly outpaced the industry average of 4.0%. Since the same quarter one year prior, revenues slightly increased by 5.9%. Growth in the company's revenue appears to have helped boost the earnings per share.
- MARRIOTT INTL INC has improved earnings per share by 35.9% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, MARRIOTT INTL INC increased its bottom line by earning $2.54 versus $2.01 in the prior year. This year, the market expects an improvement in earnings ($3.13 versus $2.54).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Hotels, Restaurants & Leisure industry. The net income increased by 25.0% when compared to the same quarter one year prior, going from $192.00 million to $240.00 million.
- After a year of stock price fluctuations, the net result is that MAR's price has not changed very much. Although its weak earnings growth may have played a role in this flat result, don't lose sight of the fact that the performance of the overall market, as measured by the S&P 500 Index, was essentially similar. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
- Net operating cash flow has remained constant at $490.00 million with no significant change when compared to the same quarter last year. In addition, MARRIOTT INTL INC has modestly surpassed the industry average cash flow growth rate of -7.88%.
- You can view the full analysis from the report here: MAR