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Bethesda, Maryland-based Marriott International, Inc. (MAR) operates, franchises, and licenses hotel residential, timeshare, and other lodging properties worldwide. With a market cap of $77.6 billion, it offers a portfolio of over 30 leading brands and nearly 9,100 properties spread across 141 countries and territories.
Although the hotel giant has lagged behind the broader market by a small margin in 2024, it has outperformed over the past 52 weeks. Marriott’s stock has surged 23.8% on a YTD basis and 35.7% over the past year, compared to the S&P 500 Index’s ($SPX) gains of 24.1% in 2024 and 31.1% over the past 52 weeks.
Narrowing the focus, Marriott has substantially outperformed the AdvisorShares Hotel ETF’s (BEDZ) 16.7% gains in 2024 and 23.4% returns over the past year.
Shares of Marriott fell 1.6% after the release of its Q3 earnings on Nov. 4 as the company’s adjusted EPS of $2.26 missed analysts’ consensus estimates by 2.2%, which unsettled investors’ confidence. Nevertheless, the company's overall performance remained robust, the company added 16,000 net rooms during the quarter while reporting a 3% year-over-year growth in global revenue per available room (RevPAR). International RevPAR surged 5.2% compared to the year-ago quarter, driven by demand in APEC and EMEA countries and average daily rate growth. This translated into a robust 5.5% year-over-year growth in total revenues, reaching $6.3 billion.
Moreover, given Marriott’s benefits to owners and franchisees, demand for its brands has remained strong. Over the past three quarters, the company signed over 95,000 organic rooms and reported a 6% growth in net rooms over the last twelve months. Its development pipeline reached a record 585,000 rooms at the end of September, showcasing excellent business momentum.
For the current fiscal year, ending in December, analysts expect a 7.3% year-over-year dip in adjusted EPS to $9.26. The company’s earnings surprise history is mixed. It surpassed analysts’ bottom-line estimates in two of the past four quarters while missing on two other occasions.
MAR stock has a consensus “Moderate Buy” rating overall. Out of the 23 analysts covering the stock, five recommend “Strong Buy,” one advises “Moderate Buy,” and 17 suggest a “Hold” rating.
This configuration is more bullish than three months ago, with three “Strong Buy” ratings on the stock.
On Nov. 5, Bernstein analyst Richard Clarke maintained an “Outperform” rating on MAR while raising the price target to $290, which suggests a potential upside of only 3.8% from current price levels.
As of writing, Marriott is trading above its mean price target of $267.39. The Street-high price target of $328 represents a premium of 17.4% to current price levels.
