Marriot International (NASDAQ: MAR) is garnering attention as a promising value play in a sector that is outperforming others, particularly during uncertain economic times. Despite posting its second-quarter 2023 earnings results, Marriot’s stock has remained relatively flat. However, investors are optimistic about the company due to several bullish factors.
First, Marriot International’s financial results have defied bearish expectations of an industry slowdown. This positive performance, combined with strong technical indicators, makes Marriot an attractive investment option.
Another advantage of owning Marriot stock is the company’s size, which acts as a risk diversification tool. With growing net sales, especially outside the United States, Marriot is less susceptible to the impact of a single country’s economic conditions.
When comparing Marriot to competitors such as Hilton Worldwide (NYSE: HLT) and Hyatt Hotels (NYSE: H), investors can identify unique opportunities within the industry.
Despite mixed analyst ratings, Marriot’s stock chart indicates a confident upward trend. The stock has been forming a steep and narrow trading channel, suggesting bullish momentum. It is also comfortably above its previous all-time high price, indicating acceptance by the broader market.
Analysts project strong earnings growth for Marriot in the next two years, with estimated EPS growth rates of 25.3% for 2023 and 9.2% for 2024. These projections further support the stock’s upward trajectory.
In its earnings press release, Marriot highlighted significant achievements, including a 13.5% growth in comparable systemwide revenues and a 7% increase in net income. Earnings per share witnessed impressive growth at 15.5%, largely driven by the company’s share repurchase program, which totaled $903 million and retired 5.2 million shares. Management’s confidence in the stock’s value is evident in this action.
Compared to its competitors, Marriot is trading at a favorable forward price-to-earnings (P/E) ratio of 22.0x. Hilton and Hyatt, on the other hand, have higher forward P/E ratios of 22.8x and 34.6x, respectively.
Considering the projected growth and the relatively low valuation, investors have an opportunity to acquire Marriot stock at an attractive price.
In summary, Marriot International continues to attract optimistic investors due to its strong financial performance, promising growth prospects, and favorable valuations compared to competitors in the industry.
