MAR

Analysis of Marriott International (MAR)

Technical Analysis MAR shows impressive momentum, significantly outperforming the market recently with strong gains. However, trading near its all-time high indicates it may be overbought in the short term, warranting caution despite the upward trend.

Fundamentals Marriott maintains solid profitability and robust cash flow generation, benefiting from its asset-light model. While leverage is manageable, the low current ratio points to limited liquidity, and the negative ROE requires monitoring despite strong operational efficiency.

Valuation MAR appears richly valued with elevated P/E and exceptionally high EV/EBITDA ratios. Negative book value and PEG ratios suggest the market may be overestimating growth prospects, indicating potential overvaluation relative to industry norms.

Risk The stock's higher volatility and substantial past drawdown highlight susceptibility to market downturns. Additionally, the hospitality sector remains sensitive to economic cycles, which could impact travel demand and financial performance.

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Investment Recommendation

Based on the analysis, a Hold recommendation is warranted at this time. While Marriott's strong operational performance and market momentum are positive, the stock's elevated valuation and proximity to all-time highs limit near-term upside potential. Investors may consider waiting for a more attractive entry point or clearer signs of sustained earnings growth before committing new capital. Existing holders should monitor travel industry trends and the company’s ability to justify its premium multiples.

RockFlow Model Forecast: Three Scenarios for 2026

Based on the comprehensive analysis provided, the 12-month outlook for Marriott International (MAR) is cautiously neutral. Key catalysts include the continued execution of its asset-light growth model and sustained travel demand, which should support robust cash flow generation. Potential risks are significant and center on economic sensitivity; a slowdown could quickly dampen travel spending, exposing the stock's high valuation and volatility. Given the lack of a specific analyst target and the current overbought technical levels, the near-term price action is likely to be range-bound, with a potential trading range between $280 and $350 as the market assesses whether earnings growth can justify the premium multiples.

Wall Street Consensus

Most Wall Street analysts are optimistic about MAR's 12-month outlook, with consensus target around $319.68, indicating expected upside potential.

Overall, MAR has investment potential but also faces challenges. Here are key factors to weigh before investing.

MAR has demonstrated exceptionally strong performance with significant outperformance against market benchmarks over the recent period. The stock shows substantial recovery momentum following a challenging previous year.

Over the past three months, MAR has surged 21.35%, dramatically outperforming the market by nearly 18 percentage points, while the one-month gain of 8.94% indicates sustained bullish momentum. With a beta of 1.157, the stock's volatility has contributed to these outsized returns relative to the broader market.

Currently trading at $322.96, MAR sits near the upper end of its 52-week range, approximately 97% of the way toward its all-time high of $331.09. Given the minimal distance from record highs and substantial recent gains, the stock appears overbought despite the strong momentum, particularly considering the maximum drawdown of -30.66% still present within the trailing year.

Revenue & Profitability Marriott demonstrated solid revenue generation with $6.5 billion in Q3 2025, though this represents a sequential decline from Q2's $6.7 billion. Profitability remains healthy with a 11.2% net profit margin, supported by strong operating margins of 18.2%. The company maintains consistent earnings power with diluted EPS of $2.67.

Financial Health The company shows moderate leverage with a 60.7% debt ratio and adequate interest coverage of 5.7x. Cash flow generation is robust with operating cash flow per share of $4.02, though the current ratio of 0.47 indicates relatively low liquidity coverage. Free cash flow conversion is strong at 87% of operating cash flow.

Operational Efficiency Operational metrics show mixed performance with a negative ROE (-23.3%) potentially influenced by equity structure, while return on capital employed remains positive at 6.2%. Asset turnover of 0.23 suggests efficient utilization of the asset-light model, and the 29.5-day cash conversion cycle indicates effective working capital management.

Valuation Level Analysis

MAR's valuation metrics present a mixed picture. The trailing P/E of 33.23 is high, and while the forward P/E of 24.29 suggests improved earnings expectations, it remains elevated. The PS ratio of 3.35 appears more reasonable, but significant concerns are raised by the extremely negative PB ratio of -22.68 and PEG ratio of -6.75, the latter indicating the market is pricing negative growth expectations. The EV/EBITDA of 69.56 is exceptionally high, suggesting the company is trading at a substantial premium to its operating earnings. Overall, these metrics point toward potential overvaluation, particularly given the negative growth and book value indicators.

Peer Comparison Analysis

A direct peer comparison cannot be comprehensively performed as specific industry average data was not provided. However, the elevated P/E and exceptionally high EV/EBITDA ratios would likely be significantly above typical averages for the hotel and resort industry, which generally features more moderate multiples. Without industry benchmarks for PS, PB, and PEG ratios, a definitive relative valuation assessment is limited, but MAR's metrics suggest it trades at a premium that may not be fully justified compared to broader industry norms.

Volatility Risk: MAR's beta of 1.157 indicates the stock is moderately more volatile than the broader market and tends to amplify market swings. This elevated volatility is confirmed by a significant one-year maximum drawdown of -30.66%, highlighting the potential for substantial price declines during market downturns.

Other Risks: The absence of a reported short interest suggests market sentiment is not overtly bearish on the stock. However, this does not eliminate other potential risks, such as sensitivity to economic cycles affecting travel demand or company-specific operational challenges.