Has Marriott’s Rally and Travel Recovery Left Limited Room for Future Returns in 2025?

• Wondering if Marriott International at around $306 a share is still a smart buy or if most of the upside is already priced in? You are not alone. This stock divides opinion among value focused investors.
• Over the last month the stock has climbed 12.6%, adding to a strong 3 year gain of 96.7% and a 5 year gain of 141.3%, while the 1 year return of 5.9% and 7 day move of 0.7% suggest momentum has cooled a little.
• Recently, investors have been digesting a mix of travel industry updates, from continued strength in global leisure and business travel to ongoing consolidation talks and expansion of loyalty partnerships across major hotel brands. For Marriott, developments around network expansion, brand refreshes and shifting expectations for interest rates and consumer spending have all fed into changing views on the stock's risk and growth profile.
• Despite that backdrop, Marriott currently scores just 0/6 on our valuation checks for being undervalued. This raises the question of whether traditional methods are missing something important. Next we will walk through the standard valuation approaches investors use, then finish with a more complete way to think about what this business might really be worth over time.

Marriott International scores just 0/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.

Approach 1: Marriott International Discounted Cash Flow (DCF) Analysis

The Discounted Cash Flow model estimates what a business is worth today by projecting the cash it can generate in the future and discounting those cash flows back to their value in $ today.

For Marriott International, the latest twelve month Free Cash Flow is about $1.9 Billion. Analysts and internal forecasts expect this to grow steadily over the next decade, with projected Free Cash Flow reaching roughly $5.5 Billion by 2035, based on a 2 stage Free Cash Flow to Equity approach that blends analyst estimates for the next few years with longer term growth assumptions from Simply Wall St.

When these projected cash flows are discounted back, the model arrives at an intrinsic value of about $267 per share, compared with a current market price around $306. That suggests the shares are roughly 14.8% above the value indicated by the DCF model, which may indicate that a significant portion of expected future growth is already reflected in the price.

Result: OVERVALUED

Our Discounted Cash Flow (DCF) analysis suggests Marriott International may be overvalued by 14.8%. Discover 916 undervalued stocks or create your own screener to find better value opportunities.

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Marriott International.

Approach 2: Marriott International Price vs Earnings

For profitable companies like Marriott International, the Price to Earnings, or PE, ratio is a useful way to judge whether investors are paying a reasonable price for each dollar of current earnings. In general, faster growth and lower risk justify a higher PE, while slower growth and higher uncertainty point to a lower, more conservative multiple.

Marriott currently trades on a PE of about 31.5x. That is well above the broader Hospitality industry average of roughly 21.2x and also ahead of the peer group average of around 29.2x, suggesting investors are already paying a premium for its brand strength, scale and earnings profile.

Simply Wall St also calculates a proprietary Fair Ratio of 28.0x for Marriott, which estimates the PE you would normally expect given its earnings growth outlook, profitability, industry, market value and risk factors. This Fair Ratio is more informative than a simple industry or peer comparison because it adjusts for Marriott’s specific fundamentals rather than assuming all hotel companies deserve similar valuations. Since the current PE of 31.5x sits noticeably above the 28.0x Fair Ratio, the shares look somewhat expensive on this metric.

Result: OVERVALUED

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Upgrade Your Decision Making: Choose your Marriott International Narrative

Earlier we mentioned that there is an even better way to understand valuation, so let us introduce you to Narratives, a simple way to connect your view of Marriott International’s story with a concrete forecast and fair value. A Narrative is your explanation for what you think will happen to a company’s revenue, earnings and margins over time, and how that should translate into a fair value per share, instead of just accepting a single target price or PE multiple. On Simply Wall St’s Community page, used by millions of investors, Narratives make this process accessible by guiding you to set assumptions, generate a forecast, and instantly compare your Fair Value to the current market price to see if Marriott looks like a buy, hold or sell to you. As new information comes in, such as earnings results, macro data or company news, Narratives update dynamically so your view stays current without starting from scratch. For example, one investor might build a bullish Narrative around rapid APAC and EMEA expansion and assign a fair value near the top of recent targets around $332, while a more cautious investor might focus on margin pressure and macro risks and land closer to the low end around $205.

Do you think there's more to the story for Marriott International? Head over to our Community to see what others are saying!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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