MAR - Embedded Expectations Analysis - 2020 04 24
ï€ Marriott International, Inc. (MAR:USA) currently trades above corporate averages relative to UAFRS-based (Uniform) earnings, with a 34.8x Uniform P/E. At these levels, the market is pricing in bullish expectations for the firm, but management may have concerns about global RevPAR, the Asia Pacific region's operations, and Marriott Bonvoyï€ Specifically, management may be downplaying concerns about the impact of reduced travel originating from China and they may be overstating the Bonvoy loyalty program's ability to shift bookings to lower-demand nights and generate cash flow. Additionally, they may lack confidence in their ability to improve U.S penetration numbers, maintain their investment-grade credit rating, and sustain North American and Middle East RevPAR growth. Furthermore, they may be concerned about declines in their Asia Pacific RevPAR, particularly in Singapore, rising G&A expenses, and the structure of their incentive management fee system. Moreover, they may lack confidence in their ability to execute their planned H1 2020 openings, and they may be exaggerating the value of their pipeline
Marriott International is a worldwide operator, franchisor, and licensor of hotel, residential and timeshare properties under various brand names at different price and service points. The company has operations in the following reportable business segments: North American Full-Service, which includes the company's Luxury and Premium properties located in United States and Canada; North American Limited-Service, which includes the company's Select properties located in United States and Canada; and Asia Pacific, which includes all properties in the company's Asia Pacific region.
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