Marriott MAR - A Strong trend, backed by strong fundamentals

12 февр.

Technicals:
Marriott is showing promising signs, with a pivot point set at 238. As long as it holds above this mark, I'm leaning towards a bullish outlook, anticipating further gains. However, if it slips below $238, we might see support levels at $231 and $227, so it's worth keeping an eye on those.

Checking the indicators, the RSI is above 70, meaning either a strong up-trend or an overbought territory, but with the MACD positive and above its signal line, and MAR comfortably above its 20 and 50-day moving averages, things are looking pretty positive overall. Keep an eye on potential corrections, but for now, it seems like smooth sailing ahead.

Fundamentals

Marriott reported strong third-quarter results, exceeding expectations with worldwide Revenue Per Available Room (RevPAR) growing 9% above guidance, driven by gains in Asia Pacific. Total company gross fee revenues reached $1.2 billion, up 13% from the previous year. International Managed Fees (IMFs) rose significantly, while non-RevPAR related franchise fees increased 8%, boosted by robust co-brand credit card performance.


Adjusted EBITDA increased by 16%, and diluted adjusted EPS grew 25% year-over-year to $2.11. The company remains committed to its asset-light model, generating substantial cash and returning $3.4 billion to shareholders in the first nine months of the year through dividends and share repurchases.


Marriott Q3 2023 Earnings Call Summary: Key Points and Future Outlook:

RevPAR growth is expected to be 6% to 7.5% in Q4 and 14% to 15% for the full year.

Total gross fee revenues are expected to rise 17% to 18%.

Adjusted EBITDA growth is expected to be 19% to 20%.

Adjusted EPS growth is expected to be 27% to 28%.

Shareholder returns are expected to be $4.3 billion to $4.5 billion.

Segment Performance:

Leisure transient demand strong, up 7% in room nights globally.

Business transient growth slow but steady, with revenues rising 4% in US and Canada.

Group business rebounded remarkably, with US and Canada group revenues pacing up 19% for the full year.

International:

Cross-border travel strengthened, driving RevPAR growth.

Asia Pacific saw the most significant increase in international visitors.

International airlift to China expected to improve, further boosting Asia Pacific.

Marriott Bonvoy Loyalty Program:

Membership reached 192 million.

Mobile app adoption growing, with downloads up 19% year-over-year.

MGM strategic licensing agreement to launch in early 2024.

Development:

Pipeline reached a record high of nearly 557,000 rooms.

Strong interest in mid-scale brands like City Express, Four Points Express, and StudioRes.

My take:
Marriott presents a compelling case for bullish sentiment, supported by its robust third-quarter performance, positive technical indicators, and optimistic outlook for key financial metrics in 2023. While mindful of potential market fluctuations, the current landscape suggests favorable conditions for Marriott's continued growth trajectory, making it an intriguing prospect for investors seeking exposure to the hospitality sector's recovery and long-term value creation.