Marriott International, Inc. (NASDAQ:MAR): Poised For Long-Term Success?

Marriott International, Inc.’s (NASDAQ:MAR) announced its latest earnings update in December 2018, which indicated that the business benefited from a strong tailwind, leading to a double-digit earnings growth of 31%. Today I want to provide a brief commentary on how market analysts perceive Marriott International’s earnings growth outlook over the next couple of years and whether the future looks even brighter than the past. I will be using net income excluding extraordinary items in order to exclude one-off volatility which I am not interested in.

See our latest analysis for Marriott International

Analysts’ outlook for next year seems rather muted, with earnings growing by a single digit 6.5%. The growth outlook in the following year seems much more buoyant with rates generating double digit 15% compared to today’s earnings, and finally hitting US$2.4b by 2022.

NasdaqGS:MAR Past and Future Earnings, April 1st 2019
NasdaqGS:MAR Past and Future Earnings, April 1st 2019

Although it is helpful to understand the growth rate year by year relative to today’s level, it may be more beneficial to gauge the rate at which the earnings are growing on average every year. The benefit of this technique is that we can get a better picture of the direction of Marriott International’s earnings trajectory over the long run, irrespective of near term fluctuations, which may be more relevant for long term investors. To compute this rate, I’ve inserted a line of best fit through analyst consensus of forecasted earnings. The slope of this line is the rate of earnings growth, which in this case is 7.1%. This means that, we can assume Marriott International will grow its earnings by 7.1% every year for the next couple of years.

Next Steps:

For Marriott International, I’ve put together three essential factors you should further examine:

  1. Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
  2. Valuation: What is MAR worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether MAR is currently mispriced by the market.
  3. Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of MAR? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!

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.

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. Thank you for reading.