Marriott International (MAR) delivered a mixed bag of results in the third quarter, reporting earnings that fell short of analyst expectations and issuing FY24 adjusted EPS guidance that was lower than anticipated. While the company did highlight positive trends, including strong net room and fee growth, active development, and a 3% rise in global RevPAR, the overall sentiment was dampened by the missed estimates.
Marriott reported adjusted EPS of $2.26 for the quarter, missing the consensus estimate of $2.31. Quarterly sales of $6.26 billion also fell slightly short of the analyst consensus of $6.27 billion. Despite the slight miss, CEO Anthony Capuano emphasized the company’s strong performance, highlighting the solid growth in net room and fees, active development, and a 3% increase in global RevPAR. He particularly emphasized the 5.4% increase in third-quarter international RevPAR, driven by robust growth in the APEC and EMEA regions, sustained domestic and cross-border demand, and significant ADR gains.
Looking ahead, Marriott expects fourth-quarter 2024 gross fee revenues to range between $1.29 billion and $1.31 billion, with adjusted EPS projected to be $2.31-$2.39, compared to a $2.31 estimate. For the full year 2024, Marriott projects adjusted EPS of $9.19-$9.27 (prior $9.23-$9.40), compared to the $9.36 estimate, with gross fee revenues of $5.126 billion-$5.146 billion (prior $5.13 billion-$5.18 billion).
The earnings announcement led to a 1.6% dip in Marriott shares, closing at $256.43 on Monday. Several analysts responded by adjusting their price targets for Marriott stock. Baird analyst Michael Bellisario maintained Marriott Intl with a Neutral rating and raised the price target from $258 to $264. Barclays analyst Brandt Montour also maintained the stock with an Equal-Weight rating and raised the price target from $240 to $249.
While Marriott’s Q3 results and FY24 guidance might not have lived up to expectations, the company remains a prominent player in the hotel industry. Its commitment to growth through active development, strong international performance, and consistent focus on improving RevPAR suggests a positive outlook for the company. Investors will be closely watching Marriott’s performance in the coming quarters to gauge its ability to navigate the current economic landscape and deliver on its growth plans.
