Marriott International, Inc. MAR
Verdict: Sell. Fair value $240 against a price of $311 on 6 Jan 2026, 23% below the price.
In plain words
The case for: Wide competitive moat provides durability. Market leadership enables pricing power. Industry tailwinds with growing market.
The case against: Intense competitive pressure could compress margins. Net Income declined by 22.7% from 2023 to 2024 ($3.08B to $2.38B) despite a 5.9% increase in.... The company has a 100% earnings beat rate over the last 4 quarters, but with an average surprise of....
Main risks
- Negative Stockholders' Equity (-$2.99B) indicates liabilities exceed assets, creating a fragile balance sheet and making metrics like ROE and D/E meaningless. This is a result of aggressive, debt-funded share buybacks.
- High leverage with an estimated Net Debt/EBITDA ratio of ~5.0x, which is a significant risk for a company in the cyclical consumer discretionary sector.
- Decelerating growth and cash flow. While post-pandemic recovery was strong, 1-year revenue growth has slowed to ~6%, and both annual (2024 vs 2023) and TTM Free Cash Flow have declined.
- Net Income declined by 22.7% from 2023 to 2024 ($3.08B to $2.38B) despite a 5.9% increase in...
- Intense competitive environment
- Net Income declined by 22.7% from 2023 to 2024 ($3.08B to $2.38B) despite a 5.9% increase in Revenue ($23.71B to $25.10B). This disconnect suggests that reported earnings are being significantly influenced by non-operating or one-time items, reducing the quality and predictability of GAAP earnings.