We continue to rate the shares of Marriott (MAR) a Hold following the release of Q4 financial results. Although we find Marriott's current valuation significantly more intriguing following the pullback of approximately 30% from the highs reached in the spring of 2007, we do not anticipate significant share price appreciation in the near term.
Given the current uncertainty regarding the state of the economy and its potential impact on Marriott's lodging and timeshare businesses, we prefer to remain cautious on the shares at this time. Our $34.25 six-month target price equates to an EBITDA multiple of approximately 10.5x our 2008 EBITDA estimate.
We note that the company lowered its 2008 EPS guidance from a range of $2.10 to $2.25 to a range of $2.00 to $2.10. Further, the company lowered its worldwide comparable 2008 RevPAR [revenue per available room] growth estimate from a range of 5% to 7% to a range of 3% to 5%. This compares to Starwood's (HOT) recently-issued guidance for system-wide RevPAR growth over the same period of 4% to 7%.
Read the full analyst report on MAR.
Read the full analyst report on HOT.
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