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Why the Optimism for Marriott in 2017?

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Part 7
Why the Optimism for Marriott in 2017? PART 7 OF 7

What Analysts Are Recommending for Marriott

Analysts’ views

According to a Reuters consensus, of the 29 analysts tracking Marriott International (MAR), 17.0% (five analysts) have a “strong buy” recommendation for the stock, and 35.0% (ten analysts) have given it a “buy.” About 41.0% (12 analysts) have given it a “hold” rating, 3.5% (one analyst) has given it a “sell,” and the remaining 3.5% (one analyst) has given it a “strong sell.”

What Analysts Are Recommending for Marriott

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After Marriott’s 4Q16 earnings release, Stifel Financial and Deutsche Bank have kept their “hold” ratings. In December 2016, MKM Partners upgraded the stock from a “neutral” to a “buy.” In September 2016, Goldman Sachs gave the stock a “buy” rating and initiated coverage. Morgan Stanley also upgraded the stock in September from “equal weight” to “overweight.”

Target price

Many analysts raised their target prices after Marriott’s optimistic 2017 guidance. The consensus 12-month target price is $91.40, which indicates a 1.9% return potential as of February 17, 2017, when the closing price was $89.36. That’s higher than the previous target price of $86.10 before the 4Q16 earnings release.

JPMorgan raised its target price to $99 from $97, and Stifel raised its target price to $84 from $78. Deutsche Bank also raised its target price to $88 from $80. Morgan Stanley raised its target price to $92 from $90. Canaccord Genuity raised its target price to $100 from $94, and Telsey Advisory raised its target price to $90 from $73.

Peer comparison

As of February 17, 2017, Wyndham Worldwide (WYN) has a target price of $89.50. That’s a 5.4% return potential compared to its closing price of $84.90. Hilton Worldwide (HLT) has a target price of $78.20, which represents a return potential of 33.7% compared to its closing price of $58.50 on February 17, 2017. Hyatt Hotels (H) has a target price of $56.50, which represents a return potential of 5.5% compared to its closing price of $53.50 on February 17, 2017.

You can get exposure to the consumer discretionary sector by investing in the iShares Russell 1000 Growth (IWF), which invests approximately 20.7% in the sector and 0.36% in the hotel industry. Its holdings include 0.08% in Wyndham Worldwide (WYN), 0.19% in Marriott International (MAR), 0.08% in Hilton Worldwide Holdings (HLT), and 0.009% in Hyatt Hotels (H).

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