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On Wednesday, BMO Capital Markets adjusted its price target for Marriott International (NASDAQ:MAR) shares, increasing it to $265 up from the previous $250, while maintaining a Market Perform rating on the stock. Currently trading at $251.96, the stock sits within a wider analyst target range of $205 to $328. The revision follows Marriott’s first-quarter performance, which was notably strong in international markets. InvestingPro analysis reveals several positive indicators, including strong returns over multiple timeframes and impressive gross profit margins above 80%.
According to BMO Capital’s analyst, Marriott’s first quarter was bolstered by robust international market performance, with the company maintaining healthy revenue growth of 4.8% over the last twelve months. Despite a softening in demand within the U.S. and Canada during March, this was primarily due to a 10% year-over-year decline in government business and challenges in select-service sectors. Importantly, this did not significantly impact the group and full-service segments. InvestingPro data shows the company maintains a "GOOD" overall financial health score, suggesting strong operational resilience.
Marriott’s guidance for the second quarter was considered light, but the company’s outlook for 2025 has been only slightly adjusted. The forecast now includes a modest $10 million reduction in EBITDA, while earnings per share (EPS) projections remain unchanged. Marriott also reduced its revenue per available room (RevPAR) growth expectations by 50 basis points, a smaller decrement compared to Hilton’s (HLT) reduction of 150 basis points. This disparity likely reflects Marriott’s lower exposure to select-service operations and greater international presence.
The analyst’s commentary highlighted that Marriott’s current projections are based on the assumption that present demand levels will persist. However, there is a noted downside risk if the macroeconomic environment deteriorates further. The company’s strategic positioning with less reliance on select-service and more on international exposure appears to be a calculated move to mitigate some of the risks associated with market fluctuations.
Marriott International’s financial health and market performance are closely monitored by investors and industry analysts, as changes in the hospitality and tourism sectors can have significant implications on the company’s revenue and growth prospects. The company currently offers a dividend yield of 1%, with impressive dividend growth of 21.15% in the last twelve months. For deeper insights into Marriott’s valuation and growth potential, investors can access comprehensive analysis through the InvestingPro Research Report, which provides detailed financial metrics and expert analysis among 1,400+ top US stocks.
In other recent news, Marriott International has reported strong financial results for the first quarter of 2025, surpassing market expectations. The company achieved an earnings per share (EPS) of $2.32, exceeding the forecasted $2.26, and generated revenue of $6.26 billion, compared to the anticipated $6.20 billion. Marriott’s acquisition of CitizenM indicates growth in the luxury segment, although the company has adjusted its full-year RevPAR growth guidance to 1.5-3.5%, down from previous estimates. Analysts from firms like Baird and Bank of America noted the company’s strategic direction and operational performance, which contributed to a positive outlook despite a challenging economic environment. The company also reported a 5% increase in gross fee revenues and a 7% rise in adjusted EBITDA. Additionally, Marriott continues to focus on digital transformation to enhance operational efficiency and has seen robust development activity, with record first-quarter global signings. Despite challenges in Greater China, Marriott remains optimistic about its growth prospects, with group bookings for 2026 tracking up 7%.
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