Yahoo Finance Marriott (MAR) Stock Up 26% in the Past Year: More Room to Run?
Marriott International, Inc. MAR is poised to benefit from robust global leisure demand, continued expansion and strategic agreements. Also, continued recovery in cross-border travel and international airline capacity have been important for sales improvement over the last few quarters.
In the past year, shares of Marriott have gained 25.5% compared with the industry’s 14.5% growth. The price performance was backed by solid earnings surprise history. Marriott’s earnings surpassed the Zacks Consensus Estimate in all of the trailing four quarters. Earnings estimates for 2023 and 2024 have moved up 3.2% and 5% in the past 60 days, respectively. This positive trend signifies bullish analysts’ sentiments and justifies the company’s Zacks Rank #1 (Strong Buy), indicating robust fundamentals and the expectation of outperformance in the near term. You can see the complete list of today’s Zacks #1 Rank stocks here.
Factors Driving Growth
Solid Demand: The company witnessed a steady increase in demand throughout second-quarter 2023. The company benefited from robust leisure demand and ADR while business transient demand improved. Also, continued recovery on cross-border travel buoyed by a rise in international visitors added to the positives.
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During the second quarter of 2023, RevPAR in the United States and Canada increased 6% year over year, backed by growth in occupancy (1.3% percentage points year over year) and ADR (4.1%). Internationally, RevPAR grew by 39.1%, with ADR increasing by 13.7% and occupancy improving 12.4 percentage points. The Asia Pacific region experienced robust demand after travel restrictions were lifted. During the second quarter, transient room nights for the leisure segment increased 5%, accompanied by a 5% rise in ADR compared with the previous year’s levels.
With global trends improving, the company also expects the recovery momentum to continue in the upcoming periods.
Expansion Efforts: Marriott is consistently trying to expand its presence worldwide and capitalize on the demand for hotels in the international markets. The company plans to expand its global portfolio of luxury and lifestyle brands significantly. At the end of second-quarter 2023, Marriott's development pipeline totaled 3,149 hotels, with approximately 547,000 rooms. More than 240,000 rooms were under construction. During the quarter, the company added 254 properties (33,097 rooms) to its worldwide lodging portfolio.
The company emphasizes the strategic licensing agreement with MGM Resorts and creating the MGM Collection with Marriott Bonvoy to drive growth. The deal expands Marriott's footprint in Las Vegas (with the addition of 17 MGM Resorts properties for bookings) and enhances loyalty program benefits for both companies. The initiative allows members to book through Marriott's digital platforms. The company is optimistic concerning the growth strategy and anticipates the deal to boost its room distribution by 2.4% in 2023. Overall, the company expects 2023 net rooms to grow in the range of 6.4-6.7% on a year-over-year basis.
Digitization Initiatives: Digital innovation and social media are playing important roles in hotel bookings and Marriot isn’t far behind in improvising. The company re-imagined its Marriott Mobile app to meet the modern traveler's needs. With nearly 186 million members globally, the company’s loyalty program, Marriott Bonvoy, is crucial in supporting its marketing strategies. Moving ahead, the company is focused on launching new reservations, loyalty and property management platforms to boost customer engagement and drive profitability.
The company recently entered into an agreement with Rappi, to enhance everyday earning and provide a superior travel experience for Marriott Bonvoy members and Rappi users. Through the collaboration with Rappi, Marriott aims to expand its reach and services to Rappi's extensive user base of over 30 million across nine Latin American countries, including Argentina, Brazil, Chile, Colombia, Costa Rica, Ecuador, Mexico, Peru and Uruguay. This partnership showcases Marriott's commitment to innovative and tech-forward collaborations that meet the evolving needs of its guests, solidifying its presence in the region.
Other Key Picks
Some other top-ranked stocks in the Consumer Discretionary sector include:
Royal Caribbean Cruises Ltd. RCL sports a Zacks Rank #1. RCL has a trailing four-quarter earnings surprise of 28.5% on average. Shares of RCL have gained 118.9% in the past year.
The Zacks Consensus Estimate for RCL’s 2023 sales and EPS indicates a rise of 54.5% and 180.3%, respectively, from the year-ago period’s levels.
Trip.com Group Limited TCOM flaunts a Zacks Rank #1. The company has a trailing four-quarter earnings surprise of 147.9% on average. Shares of TCOM have increased 50.9% in the past year.
The Zacks Consensus Estimate for TCOM’s 2023 sales and EPS indicates a rise of 106% and 537.9%, respectively, from the year-ago period’s levels.
Skechers U.S.A., Inc. SKX sports a Zacks Rank #1. The company has a trailing four-quarter earnings surprise of 39.1% on average. Shares of SKX have increased 31.8% in the past year.
The Zacks Consensus Estimate for SKX’s 2023 sales and EPS indicates a rise of 8.7% and 42%, respectively, from the year-ago period’s levels.
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Marriott International, Inc. (MAR) : Free Stock Analysis Report
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