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Raymond James Upgrades Marriott on "Simple, but Powerful Strategy"

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In a report published Monday, Raymond James analyst William Crow upgraded Marriott International, Inc. (NASDAQ: MAR) from Market Perform to Outperform and announced a $60.00 price target following the company's release of fourth quarter and full year 2013 results on February 19.

On Wednesday, Marriott reported Q4 EPS of $0.49 versus the estimated $0.50. EPS and sales were down 13% and 14%, respectively, from the same quarter last year. Revenue came in at $3.22B versus the estimated $3.31B. Management is looking for first quarter and FY2014 EPS to be within $0.47-$0.52 and $2.29-$2.45, respectively.

Crow noted the company's "simple, but powerful, strategy" of delivering solid earnings growth. The analyst commented on the company's approximate 5% room count growth per year and the return of $1 billion per year to shareholders. Raymond James added, "Momentum within Marriott seems to be building as of late, with a sizeable jump in the development pipeline (35% sequential increase in room count), accelerating capital distributions to shareholders ($1.25-1.5 billion target in 2014), an improved outlook in several global markets, slowing G&A expense growth, and growing free cash flow. […] The bottom line is that we believe Marriott can outperform the broader market (though likely lag more asset-laden peers) in a more bullish economic growth environment and hold its own (and likely outperform the asset-laden peers) in a more modest economic growth environment."

The analyst raised 2014 and 2015 EPS estimates to $2.42 and $2.86, up $0.03 and $0.10, respectively. Raymond James also increased EBITDA estimates for 2014 and 2015 from $1.334 to $1.365 billion, and from $1.489 to $1.517 billion.

Shares of Marriott closed at $53.47 on Monday, up 1.83% for the day.

Latest Ratings for MAR

Jul 2015Canaccord GenuityInitiates Coverage onHold
Jun 2015Brean CapitalInitiates Coverage onHold
May 2015BarclaysMaintainsOverweight

View More Analyst Ratings for MAR
View the Latest Analyst Ratings

Posted-In: Raymond James William CrowAnalyst Color Upgrades Analyst Ratings


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