Is Now An Opportune Moment To Examine Marriott International, Inc. (NASDAQ:MAR)?

By
Simply Wall St
Published
February 14, 2020
NasdaqGS:MAR

Let's talk about the popular Marriott International, Inc. (NASDAQ:MAR). The company's shares saw a decent share price growth in the teens level on the NASDAQGS over the last few months. As a large-cap stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. However, could the stock still be trading at a relatively cheap price? Let’s examine Marriott International’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.

View our latest analysis for Marriott International

Is Marriott International still cheap?

According to my valuation model, the stock is currently overvalued by about 32%, trading at US$147 compared to my intrinsic value of $111.00. This means that the opportunity to buy Marriott International at a good price has disappeared! If you like the stock, you may want to keep an eye out for a potential price decline in the future. Given that Marriott International’s share is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us another chance to buy in the future. This is based on its high beta, which is a good indicator for share price volatility.

Can we expect growth from Marriott International?

NasdaqGS:MAR Past and Future Earnings, February 14th 2020
NasdaqGS:MAR Past and Future Earnings, February 14th 2020

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. Marriott International’s earnings over the next few years are expected to increase by 74%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value.

What this means for you:

Are you a shareholder? It seems like the market has well and truly priced in MAR’s positive outlook, with shares trading above its fair value. At this current price, shareholders may be asking a different question – should I sell? If you believe MAR should trade below its current price, selling high and buying it back up again when its price falls towards its real value can be profitable. But before you make this decision, take a look at whether its fundamentals have changed.

Are you a potential investor? If you’ve been keeping tabs on MAR for some time, now may not be the best time to enter into the stock. The price has surpassed its true value, which means there’s no upside from mispricing. However, the positive outlook is encouraging for MAR, which means it’s worth diving deeper into other factors in order to take advantage of the next price drop.

Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Marriott International. You can find everything you need to know about Marriott International in the latest infographic research report. If you are no longer interested in Marriott International, you can use our free platform to see my list of over 50 other stocks with a high growth potential.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.

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