MKM Partners Raises Price Target on Marriott (MAR) to $98; Reiterates Buy

MKM Partners reiterated a Buy rating on Marriott International (NASDAQ: MAR), and raised the price target to $98.00 (from $90.00). MKM Partners Chief Market Technician, Jonathan Krinsky, notes that after a big decline from mid-2015 into early 2016, the stock has nearly recovered the entire loss. It could probably consolidate in this $85 area (prior resistance), but a breakout above that would suggest a completion of a two-year base with upside potential towards $100. MKM models FY17 adj. EBITDA and EPS of $3,167mn and $4.16, respectively, compared to consensus of $3,030mn and $4.02. The top-line is driven by 2% RevPAR growth (guidance of 0%-2%) and 6% unit growth

Analyst Christopher Agnew commented, "We see potential upside to earnings estimates in 2017 driven by: (1) stronger corporate transient demand, (2) accelerating share repurchases, and (3) execution of revenue and cost synergies from the Starwood acquisition. Marriott guided RevPAR growth of 0%-2% in FY17 (compared to its closest peer guiding 1%-3%). We recently upgraded lodging based on an improved economic outlook (NGDP acceleration to 3.0%-3.5%) and potential tailwinds for corporate America (tax cuts, regulation). We therefore see potential upside to corporate transient demand, RevPAR and estimates over the next twelve months. Even with low-single digit RevPAR, MAR’s top-line benefits from strong unit growth (6%-7% annually). MAR’s global scale and the strength of its brands and loyalty program, in our view, attract third- party capital and is enabling the company to take market share (supply) in developed economies and participate in the secular emerging economies. MAR's asset-light, fee-based business model generates high ROIC (~50%) and strong FCF. We strongly reiterate our Buy rating and our price target moves to $98 (14% upside potential) based on 14.0x our FY17 adj. EBITDA and net debt estimates."

For an analyst ratings summary and ratings history on Marriott International click here. For more ratings news on Marriott International click here.

Shares of Marriott International closed at $86.05 yesterday.

You May Also Be Interested In

• Marti Technologies (MRT) PT Raised to $6 at Benchmark on Stronger Growth, Improved Earnings Visibility
• Benchmark Reiterates Hold Rating on Codexis, Inc. (CDXS) Amid Transition to New Products/Services
• Rubrik Inc (RBRK) PT Raised to $120 at Oppenheimer; Sees Another 'Beat and Raise'