Stifel has increased its 12-month price target on Marriott International to $333.00 from $279.00 while retaining a Hold rating on the shares. The move follows the company’s most recent quarterly report and highlights a split set of results that produced both upside and downside surprises.
Marriott shares are trading at $360.47, already above Stifel’s revised target and noted as hovering near a 52-week high of $333.96. Separate fair-value analysis indicates the stock appears overvalued relative to its assessed intrinsic value.
Earnings and margin profile
Marriott’s fourth-quarter adjusted EBITDA came in at $1,402 million, beating Street expectations of $1,390 million and edging above the upper end of the company’s guidance range of $1,371-$1,401 million. The company sustained strong gross profit margins of 81.55%, a metric that underpins its reported EBITDA strength.
On the bottom line, adjusted earnings per share were reported at $2.58. That result fell short of analyst expectations, landing $0.06 below Stifel’s internal estimate and $0.02 under the Street consensus. Management’s previously issued guidance for the quarter had set an adjusted EPS range of $2.54-$2.62, putting the actual result in the lower half of the guided band.
Analyst view and drivers of the EPS shortfall
Stifel’s review of the quarter points to higher-than-expected owned and leased property expenses as well as increased general and administrative costs as the primary drivers of the EPS miss. While the company met its adjusted EBITDA guidance, these elevated expense items weighed on reported earnings per share.
Revenue and market reaction
In addition to the EBITDA beat, Marriott topped revenue forecasts for the quarter, reporting $6.69 billion versus expectations of $6.67 billion. That top-line outperformance has been highlighted by analysts as a constructive element of the release and one factor supporting a measuredly positive reception despite the minor EPS shortfall.
The combination of a revenue beat, stronger-than-expected adjusted EBITDA and an EPS miss has produced a nuanced financial picture. Investors and analysts are observing these mixed signals closely as they consider how the results could affect Marriott’s near-term strategy and financial priorities.
Context from company guidance
Marriott had supplied guidance for the quarter of $1,371-$1,401 million for adjusted EBITDA and $2.54-$2.62 for adjusted EPS. The business delivered on EBITDA within that guided range but finished in the lower half of the EPS corridor, reflecting the elevated expense pressures cited by Stifel.
These outcomes underline a split performance for the period: strong operating profitability metrics versus cost items that compressed per-share earnings.
Outlook considerations
Given the mixed results and Stifel’s unchanged Hold rating despite the higher target, market participants will likely watch expense trends, revenue momentum and margin sustainability as primary variables shaping Marriott’s trajectory. How management responds to owned/leased expense pressure and G&A increases will be a focal point for investors and analysts in subsequent reporting cycles.
The differing signals in the quarter - EBITDA and revenue beats versus an EPS shortfall and valuation questions - create a complex backdrop for the stock and for stakeholders assessing the company’s performance and strategy going forward.