Shares of Giant Marriott hotel rise on pace with fourth quarter earnings
SGlobal hospitality giant Marriott’s hares jumped nearly 3% in premarket trading on Tuesday after the hospitality company reported better-than-expected fourth-quarter earnings and revenue, largely driven by higher rates of higher vaccinations and the relaxation of travel restrictions during the holiday season.
The Bethesda Maryland-based company reported net income of $468 million, or $1.42 per share, compared with a loss of $164 million, or 50 cents per share, a year ago. The US hotel operator reported quarterly adjusted earnings per share of $1.30, beating Wall Street consensus estimates of $1.04 per share.
The company’s revenue more than doubled to $4.45 billion. It also exceeded market expectations by $3.98 billion. Increased travel during the holiday quarter as well as the easing of travel restrictions supported revenue growth.
“While Omicron caused a temporary setback in the global demand recovery in January, particularly for passenger and group business travel, new bookings across all customer segments rebounded to recovery levels. ‘before Omicron. We are optimistic that the global recovery will progress significantly through 2022,’ said Anthony Capuano, Chief Executive Officer.
For this year, Capuano expects gross room growth close to 5% and cuts of 1-1.5%, which will translate into an anticipated net room growth of 3.5-4%. Marriott expects capital expenditures for the year 2022 to total between $600 million and $700 million.
Marriott stock rose 2.78% to 176.10 in premarket trading on Tuesday. The stock is up nearly 5% so far this year after jumping more than 25% in 2021.
“The stronger-than-expected results should be a positive surprise for the stock, which continues to support our bullish view and our Street-High target. In particular, the better-than-expected NUG and related forecast guide both support the continued upside in equities,” noted David Katz, equity analyst at Jefferies.
“Finally, although Mgt has not yet guided capital allocation, the strong quarter supports our capital return forecast through 2H22.”
Marriott stock price prediction
Eight analysts who offered stock quotes for Marriott over the past three months forecast a 12-month average price of $169.13 with a high forecast of $192.00 and a low forecast of $150.00.
The average price target represents a -1.28% change from the last price of $171.33. Of these eight analysts, three rated “Buy”, five rated “Hold”, while none rated “Sell”, according to Tipranks.
Morgan Stanley gave the base price target of $158 with a high of $226 in a bullish scenario and $115 in a worst-case scenario. The investment bank assigned an “equal weight” rating to the shares of the hosting company.
“We expect US industry RevPAR to take approximately 4 years to return to 2019 levels post-COVID, given that our business travel surveys suggest structural headwinds. The world’s largest hotel brand creates economies of scale, but the law of large numbers has also resulted in lower unit growth than its peers,” noted Thomas Allen, equity analyst at Morgan Stanley.
“With the stock trading above its historical average multiple, we see too great a risk-reward ratio to warrant a recommendation, with ups/downs driven by the strength and speed with which trade trends return to the bottom. normal after COVID-19.”
Several analysts also updated their stock outlook. Berenberg raised the target price from $130 to $165. BofA Global Research raised the price target from $180 to $190. Cowen and company raised the target price from $170 to $180.
Technical analysis suggests it is good to buy as the 100 day moving average and the 100-200 day MACD oscillator show a strong buying opportunity.
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This article originally appeared on FX Empire
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