Shares of Marriott Vacations Worldwide Corp. VAC hit a new 52-week high of $89.85 toward the end of the trading session on May 28 backed by strong first-quarter 2015 results. The company’s closing price of $89.8 reflects a year-to-date return of over 21.2%.
The company’s share price has been gaining momentum since it raised the 2015 outlook and reported solid first-quarter results on Apr 30.
Marriott Vacations reported first-quarter results wherein the company raised the earnings guidance for 2015, and beat the Zacks Consensus estimate for both earnings and revenues. The company’s development margin rose to 21.6% from 18.9% a year ago with North American development margin expanding to 23.7% from 22%. North American volumes per guest also rose 4.7% year over year to $3,640.
A time-share business garners the majority of revenues from contract sales. With contract sales up 23% year over year, driven by higher vacation ownership contract sales in the company's North America and Asia segments, we believe that this Zacks Rank #1 (Strong Buy) stock has more upside left in it.
The company also raised the full-year earnings guidance to a range of $3.29–$3.48 from $3.16–$3.35. The Zacks Consensus Estimate for 2015 rose 5.2% to $3.47 from $3.30 over the past 30 days. Earnings are expected to grow in double digits in 2015 compared with $2.93 per share in 2014.
Marriott Vacations is poised to continue rising on both industry trends and competitive advantages as timeshare companies are gaining from the gradually improving U.S. economy.
A couple of stocks in the same sector that are worth considering are China Lodging Group, Limited HTHT and Intrawest Resorts Holdings, Inc. SNOW. Both these stocks carry a Zacks Rank #1. Another stock that can be considered is Peak Resorts, Inc. SKIS with a Zacks Rank #2 (Buy).
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