Marriott Stock Slammed on Dramatic Earnings Miss

Marriott suffered a 90% plunge in revenue per available room in April

Deputy Editor
May 11, 2020 at 11:34 AM
facebook twitter linkedin


Marriott International Inc (NASDAQ:MAR) is sinking even deeper into the red at midday, down 5.6% at $82.40 at last check, following the hotel name's first-quarter earnings report, which came in well below analysts' estimates. While its revenue report topped expectations, the firm said it suffered a roughly 90% drop in revenue per available room last month. Marriott did note, though, that its bookings in Greater China were stronger in April as the region begins to open back up after months of lockdown. 

The drop puts MAR back below its 50-day moving average -- a trendline the stocks been dancing around since a brief surge in late April. Recent support at the $80 level remains in place, though the equity still suffers a year-to-date deficit of 45.8%. 

Considering this sub-par price action, it's no wonder the majority of analysts covering MAR are lukewarm at best. Of the 19 in coverage, 14 call it a "hold," one says "strong sell," and only four consider it a "strong buy." The consensus 12-month price target of $95.20, meanwhile, is a 16.2% premium to current levels. 

The options pits are echoing this bearish sentiment, per MAR's 50-day put/call volume ratio of 2.18 at the International Securities Exchange (ISE), Cboe Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). This ratio sits higher than 80% of all other readings from the past 12 months, suggesting a much healthier appetite for long puts of late. 

While puts are still outnumbering calls during today's trading, the 5,133 calls traded so far count for two times MAR's average intraday pace. This is compared to the 6,929 puts traded as of this writing, which are also running at a slightly quicker-than-usual clip. The July 105 call is the most popular, with positions being opened here, followed by the May 70 put. 

 

Winning With Weekly Options

1606854690

  


 
Special Offers from Schaeffer's Trading Partners