Shares of Marriott Vacations Worldwide Corp. (VAC) gained 2.7% in Monday’s early trade, even though the company reported mixed results for the third quarter of 2021.
The company engages in selling and management of vacation ownership and related products under the Ritz-Carlton Destination Club and Marriott brands.
Quarterly earnings of $1.60 per share surpassed the Street’s expectations of $1.42 per share. Also, the figure compares favorably with a loss of $0.81 per share in the same quarter last year. Revenue climbed 62% year-over-year to $1.05 billion but lagged the consensus estimate of $1.08 billion.
Supported by business recovery, revenue from vacation ownership grew 123%. Also, growth in Exchange & Third-Party Management unit contributed to the upside. Total active members fell 15% year-over-year to 1.3 million, but average revenue per member climbed 17%. (See Marriott Vacations stock chart on TipRanks)
The CEO of Marriott Vacations, Stephen P. Weisz, said, “First time buyers represented more than 30% of contract sales in the third quarter, which is important for the long-term health of the system. The fourth quarter has started well with October contract sales above 2019 levels and reservations on the books for the first half of next year are already strong.”
The company anticipates reporting fourth-quarter contract sales in the range of $385 million to $405 million on expectations of continued business recovery.
Wall Street’s Take
Last month, Jefferies analyst David Katz maintained a Buy rating on Marriott Vacations but lowered the price target to $190 (11.4% upside potential) from $200.
Katz said, “VAC’s business has proven to be resilient through COVID and is on a compelling path to recovery… While the broader leisure industry is benefiting from pent-up demand, we believe VAC is able to grow margins through 2023.” (See Analysts’ Top Stocks on TipRanks)
Overall, the stock has a Moderate Buy consensus rating based on 2 Buys. The average Marriott Vacations price target of $194 implies 13.8% upside potential from current levels.
According to the tool, the number of total unique visitors for September 2021 on all devices is at 26.3 million, up 44.4% year-over-year. On a year-to-date basis, the number of total unique visitors to the company’s website jumped 40% from the comparable period last year.