FBR Capital maintains an 'Outperform' on Marriott International (MAR); Confident in Long-Term Story, but No Denying Weak D.C. and Group Business

FBR Capital maintains an 'Outperform' on Marriott International (NYSE: MAR), PT $44.

FBR analyst says, "Following mediocre 2Q results, we are lowering our earnings estimates. Our 2011 and 2012 EPS estimates are falling to $1.42 and $1.74 from $1.44 and $1.79, respectively. Our 2011 and 2012 adjusted EBITDA estimates are decreasing to $1.168 billion and $1.327 billion from $1,194 billion and $1,370 billion, respectively. As we discussed going into Marriott’s earnings, MAR is a “show me” story, with Marriott needing to demonstrate that its brands could “show” RevPAR growth comparable to the Smith Travel Research industry averages. Unfortunately, in our view, Marriott’s brands underperformed the averages again in 2Q, and subsequently the stock still continues to be a “show-me” story (that “no showed” this past quarter). Despite near-term RevPAR growth challenges in D.C. and cheap group business on the books that only slowly continues to burn off, we still like the stock primarily based on attractive free cash flow..."

For more ratings news on Marriott International click here and for the rating history of Marriott International click here.

Shares of Marriott International closed at $34.69 yesterday.

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