Marriott International Inc MAR hosted its first investor day in two years on Monday. The meeting focused on the progress Marriott made since its merger with Starwood in 2016, and announced the company plans to open 1,700 hotels within the next three years.
The Analyst
Raymond James analyst William Crow reiterated an Outperform rating and raised his price target from $137 to $139.
The Thesis
Marriott’s investor day couldn't have come at a better time, Crow said in a note. After facing several challenges recently, management served as a “poignant reminder of the power/durability of Marriott’s asset-light, free cash flow generating business model."
The analyst continues to favor Marriott shares given what he views as an attractive valuable, the company’s dominant position as a global brand powerhouse, industry-leading development pipeline and a business model that facilitates hefty capital returns to shareholders.
The company has over 30 brands, but doesn't believe that's too many or even enough to serve all of its customers needs and to blanked all geographic locations on a long-term basis. Marriott also touched on the turnaround of the Sheraton brand and the power and growth of the newly-rebranded loyalty program, Marriott Bonvoy.
Marriott offered a multi-year forecast that mostly beat the Raymond James's base-case expectations and in a downside scenario, the company would still generate positive growth in EPS and EBITDA while delivering $7.5-$9.5 billion in capital to shareholders, said Crow.
Price Action
Marriott shares traded at $123.84 Wednesday afternoon.
Related Links:
3 Charts That Show Marriott Is In For More Downside Over The Next 3 Days
Credit Suisse Buying In On Marriott's Timeshare Business
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