Marriott’s Strong Performance Outshines Market Despite Q3 Earnings Dip

Bethesda, Maryland-based Marriott International, Inc. (MAR) operates a variety of hotel and lodging properties around the globe, managing a substantial portfolio that includes over 30 brands and nearly 9,100 properties in 141 countries. With a market capitalization of $77.6 billion, Marriott remains a significant player in the hospitality industry.

Stock Performance Shows Resilience Despite Recent Setback

While the hotel chain has slightly underperformed against the broader market in 2024, its previous year’s performance has been noteworthy. Year-to-date, Marriott’s stock has risen by 23.8% and 35.7% over the past year. In comparison, the S&P 500 Index has gained 24.1% in 2024 and 31.1% during the last 52 weeks.

Marriott also significantly outpaced the AdvisorShares Hotel ETF’s (BEDZ) gains of 16.7% this year and 23.4% over the last year.

Q3 Earnings Report Shows Growth in Revenue

Following the release of its Q3 earnings on November 4, Marriott’s shares dropped 1.6% as its adjusted EPS of $2.26 fell 2.2% short of analyst expectations, which caused some anxiety among investors. However, overall, the company remains strong, having added 16,000 net rooms this quarter, alongside a 3% year-over-year increase in global revenue per available room (RevPAR). Notably, international RevPAR climbed by 5.2%, driven by demand in APEC and EMEA regions.

This positive performance resulted in total revenues reaching $6.3 billion, an impressive growth of 5.5% compared to last year. With strong demand from owners and franchisees, Marriott continues to see growth. Over the last three quarters, they signed over 95,000 organic rooms and reported 6% net room growth in the past year, leading to a record development pipeline of 585,000 rooms as of September.

Analysts Weigh In on Future Performance

Looking ahead to the current fiscal year ending in December, analysts predict a 7.3% decrease in adjusted EPS to $9.26. Marriott’s earnings surprise history shows variability, with the company exceeding analyst estimates twice in the last four quarters and missing them on two occasions.

The consensus rating on MAR stock is a “Moderate Buy,” based on the opinions of 23 analysts. Among them, five recommend a “Strong Buy,” one advocates a “Moderate Buy,” while 17 suggest a “Hold” rating.

Analyst Target Prices Suggest Modest Upside

This outlook has become more optimistic than it was three months ago, now showing three “Strong Buy” ratings on the stock. On November 5, Bernstein analyst Richard Clarke reaffirmed an “Outperform” rating on MAR and increased the price target to $290, indicating a modest potential upside of only 3.8% from where the stock is currently trading.

As of now, Marriott is trading above its average price target of $267.39. The highest price target from analysts is set at $328, signaling a possible premium of 17.4% over current levels.

On the date of publication, Aditya Sarawgi did not hold positions in any of the securities mentioned in this article. All information presented is for informational purposes only. For further details, please refer to the Barchart Disclosure Policy.

The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.