Sunday, 3 March 2024

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Hold Rating Justified by Mixed Outlook and Competitive Challenges – TipRanks Financial Blog

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Marriott International (MARResearch Report), the Consumer Cyclical sector company, was revisited by a Wall Street analyst today. Analyst Carlo Santarelli from Deutsche Bank maintained a Hold rating on the stock and has a $208.00 price target.

Geoff Meacham has given his Hold rating due to a combination of factors concerning Marriott International’s recent performance and future guidance. Despite Marriott reporting earnings that surpassed both Deutsche Bank’s model and the consensus estimates, when adjusted for one-time termination benefits and litigation reserve expenses, the results aligned closer to expectations. This adjustment, along with a mixed initial outlook for 2024 and the pressure from a high inflation report, contributed to the stock’s performance lagging behind its peers.

Santarelli also considered the growth prospects and operational factors in his analysis. Marriott’s guidance for 2024 indicates a steady revenue per available room (RevPAR) growth, but organic net unit growth is trailing behind competitors. The less than expected flow-through to adjusted EBITDA, fee production challenges due to the MGM deal, the difficulty in comparing to one-time benefits received in 2023, and Marriott’s typical conservative forecasting are additional reasons for the Hold rating. Moreover, while the room growth and group revenue are showing positive trends, the full-year adjusted EBITDA and EPS forecasts have been set slightly lower than consensus expectations, suggesting a cautious outlook for the year ahead.

In another report released on February 7, Macquarie also maintained a Hold rating on the stock with a $245.00 price target.

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Marriott International (MAR) Company Description:

Marriott International, Inc. engages in the operation and franchise of hotel, residential, and timeshare properties. It operates through the following business segments: North American Full-Service, North American Limited-Service, Asia Pacific, and Other International. The North American Full-Service segment includes luxury and premium brands located in the U.S. and Canada. The North American Limited-Service segment…

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