Marriott International (MAR – Research Report), the Consumer Cyclical sector company, was revisited by a Wall Street analyst today. Analyst Geraldine Wong from DBS maintained a Hold rating on the stock and has a $272.00 price target.
Geraldine Wong has given her Hold rating due to a combination of factors influencing Marriott International’s current market position. The company’s financial performance shows a steady increase, with adjusted EBITDA rising by 7% year-over-year, driven by higher fee income. However, future growth projections for Revenue Per Available Room (RevPAR) are expected to slow down, with guidance indicating a tapering to 2.0% – 4.0% growth next year, compared to 4.3% for 2024.
Despite Marriott’s strong market leadership in the luxury hospitality sector and its robust membership program, the stock’s recent price rally of 27% has led to a forward EV/EBITDA ratio at a 5-year historical high, suggesting that the growth is already priced in. Additionally, macroeconomic uncertainties and potential increases in staffing costs could impact the company’s profitability margins. These factors, combined with the company’s limited exposure to the upscale and midscale segments, contribute to the Hold rating, as the current market valuation appears to reflect these growth prospects.
In another report released on February 18, Wells Fargo also maintained a Hold rating on the stock with a $277.00 price target.