What Happened To Marriott?

Recently, Canaccord Genuity issued a company note on Marriott International Inc. MAR after the company announced earnings that fell below consensus estimates while offering FY 2016 guidance that is in line with expectations. Currently, analysts at Canaccord Genuity rate Mariott as a Buy with a $88 price target. Ryan Meliker and Michael Kodesch, analysts at Canaccord Genuity, wrote, "MAR reported a 4Q miss, issued soft 1Q guidance and issued full-year guidance that is in line with consensus...Color pertaining to the outlook and the HOT transaction will be the key drivers of the stock, but we believe MAR has set itself up for a nice beat and raise story, if the US does not enter a recession." Canaccord gave 2 initial takeaways following the disappointing earnings announcement: 1. Profitability Analysts noted that one of the primary causes for the earnings miss of Marriott was higher G&A expenses and a lower RevPar which caused fee guidance to come in $11 million below expectations. 2. Starwood Hotels & Resorts Worldwide Inc. HOT transaction Canaccord analysts believe that the transaction will be one of the primary drivers of Marriott's stock in 2016 as the combined company attempts to integrate operations efficiently while taking advantage of economies of scale and increased pricing power. However, this transaction may place restrictions on Marriott's share repurchase program. Currently, Marriott is trading at $64.58, down 3.24 percent. Currently, Starwood is trading at $65.18, down 2.52 percent.