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Investors Remain Optimistic About Marriot International

Marriott International (NASDAQ: MAR) is seen as a promising investment opportunity in a sector that is outperforming others, which is especially important during uncertain economic times. Despite posting its second quarter 2023 earnings results, Marriott’s stock price has remained relatively stable. This is notable considering the cyclical nature of the hotel industry that Marriott operates in.

Key Points

  • Marriott International surpassed bearish expectations of an industry slowdown with its second quarter 2023 earnings results.
  • Strong technical signals and positive financial results make Marriott an attractive option for investors looking to enter the booming hotel sector.
  • The company’s size acts as a risk-diversification tool, as it has seen growth in net sales, particularly in international markets.
  • Investors can compare Marriott’s performance to its competitors, such as Hilton Worldwide (NYSE: HLT) and Hyatt Hotels (NYSE: H), to identify potential investment opportunities.

An Unstoppable Force Meets… A Movable Object?

Marriott’s stock chart shows a bullish pattern, indicating potential upward movement. The stock has been trading in a steep and narrow channel for the past year and a half, while most of the market has been trading sideways. This suggests that Marriott has a clear direction going forward.

The stock’s technical indicators, such as its distance from the 200-day moving average, further support a bullish outlook. Additionally, Marriott’s stock price is currently above its previous all-time high, indicating acceptance by the market and potential for further growth.

Analysts expect Marriott to experience significant earnings per share (EPS) growth in the next two years. The estimated EPS growth rate for 2023 is 25.3%, while projections for 2024 reflect a rate of 9.2%.

Fundamentals and Valuations Make Way

In its earnings press release, Marriott highlights its strong performance in key areas. Comparable systemwide revenues grew by 13.5% during the year, surpassing expectations of a slowdown in the lodging and tourism industry.

Net income increased by 7%, while earnings per share grew by 15.5%. This disparity can be attributed to Marriott’s share repurchase program, which reduced the number of outstanding shares and boosted EPS growth.

Marriott’s stock is also attractively valued compared to its competitors. The company’s forward price-to-earnings (P/E) ratio is lower than that of Hilton and Hyatt, indicating that Marriott may be undervalued.

Overall, analysts’ positive outlook on Marriott’s growth prospects, combined with its favorable valuations, make it an appealing investment opportunity in the hotel industry.

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