BMO Capital Markets raised its target price for Marriott International (NASDAQ:MAR) to $400.00 from $370.00 and reiterated an Outperform rating on the hotel operator's shares. The firm pointed to a stronger-than-expected 2026 outlook that leaves room for upside to both EBITDA and earnings per share, while citing two operational drivers in particular: net unit growth and increased credit-card fees.
Shares of Marriott have moved sharply higher in recent trading, climbing 10.72% over the past week and trading close to their 52-week high, according to InvestingPro data. Despite that recent rally, InvestingPro's Fair Value model still indicates the company appears undervalued.
BMO said net unit growth - a key investor concern heading into the results - looks healthier than anticipated. Management's guidance calls for 4.5% to 5.0% net unit growth for the period referenced, an acceleration versus 2025, supported by robust conversion activity and a 15% expansion in properties currently under construction. The research note framed that trajectory as a pickup in franchise and conversion momentum that contributes to the firm's expectation for higher EBITDA and EPS.
The firm also flagged fee-related dynamics as material to the outlook. A higher royalty rate is expected to be a primary driver behind a forecasted 35% jump in credit-card fees. BMO noted upcoming renegotiations tied to co-branded card programs could provide incremental upside beyond that projection.
InvestingPro data referenced by BMO underscores Marriott's strong operating efficiency, showing gross profit margins of 94.45%. InvestingPro additionally lists 17 further investment insights for Marriott in its Pro Research Report.
While BMO acknowledged that demand fundamentals across the broader hospitality sector remain mixed, the firm said Marriott's upper-end portfolio appears relatively well-positioned in the current market. The company currently trades at a price-to-earnings ratio of 34.83, a multiple that reflects investor willingness to pay for its premium positioning despite the elevated valuation.
Marriott's reported fourth-quarter 2025 results contained both upside and a slight miss relative to consensus. The company posted adjusted EBITDA of $1,402 million, beating the Street expectation of $1,390 million and topping the company's own guidance range. Revenue for the quarter was $6.69 billion, above the $6.67 billion analysts had anticipated. On the profitability side, reported EPS came in at $2.58, a slight miss versus the $2.61 consensus.
Following those results, several sell-side analysts adjusted their targets higher. Barclays lifted its price target to $356, attributing the change in part to an unexpected increase in the royalty rate from Marriott's co-branded credit card program. BofA Securities raised its target to $395 and maintained a Buy rating after the EBITDA outperformance. Stifel also moved its target up to $333, citing the company's EBITDA performance as a key driver. These revisions reflect a broadly constructive response from analysts despite the modest EPS shortfall.
What this means for markets and investors
- Analyst confidence in Marriott's near-term profit trajectory is rising, driven by unit growth and fee recoveries that directly affect EBITDA and EPS.
- The stock's premium multiple and proximity to 52-week highs indicate investor appetite for higher-end hospitality exposure, even as sector demand varies.
- Credit-card program economics - including royalty rates and renegotiation outcomes - are a material earnings lever for the company.
Context and limitations
While the estimates and commentary from BMO and other firms point to potential upside, the company did record a slight EPS miss in the quarter, underscoring that results can contain offsetting signals. The market's reaction and subsequent analyst revisions also show how sensitive valuation is to fee structures and unit growth assumptions.