Pleasure travelers may have moved Marriott’s stock as high as possible

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Marriott Stock should stay on your watchlist for now

After releasing a strong earnings report, shares of Marriott International (NASDAQ: MAR) are trading above its 52 week high. The Relative Strength Index (RSI) suggests the rally in MAR stock may be poised to reverse.

And this bearish sentiment is echoed by the 13 analysts followed by MarketBeat. The stock is trading around 13% above the consensus target. However, there are two sides to a story. And within two days since the company reported earnings, Marriott has received two target price increases. And while these two analysts are keeping MAR stock below its current price, investors should be very careful to see if more upgrades are on the horizon.

This creates an interesting dynamic for investors. On the one hand, the action seems overvalued; on the other hand, technical indicators indicate that the stock will go up.

Comps will start to get harder

The company reported earnings in line with analysts’ expectations of 99 cents per share. And revenue hit $ 3.95 million better than expected, from $ 3.71 million expected.

Obviously, these numbers are significantly better than the numbers released in the same quarter in 2020. It is also evident that the results are not as good as the numbers released by Marriott in 2019.

This is where things get interesting for the MAR stock. It is about a year since the announcement that the Covid-19 vaccine from Pfizer (NYSE: PFE) and BioNTech (NASDAQ: BNTX) received emergency use authorization. Almost on order, the MAR stock began to recoup its pandemic losses. But this recovery was blocked first because of the uneven recovery and then because of the emergence of the Delta variant.

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With that in mind, this may be the last quarter in which Marriott faces a low bar to cross. It will now be imperative for the company to continue to show that revenues and profits are approaching pre-pandemic levels.

What will the new normal look like?

I have had several opportunities to stay at hotels (including full disclosure at some Marriott properties) over the past six months. The words new normal are very appropriate. Many concessions are still made in the face of the pandemic. One of the most notable is the current housekeeping situation which remains something guests shouldn’t expect for a multi-day stay.

In two cases, the hotels where I was staying benefited from marriage trafficking. And that made the hotel feel a bit “normal”. On a few other occasions it was evident that it will be some time before occupancy rates return to normal. Some of these issues could be resolved if and when business travel resumes. But no one can accurately predict what business travel will look like, especially with the issue of outstanding vaccination mandates.

However, Marriott said corporate special bookings were down less than 40% year over year.

Pleasure travel increases stock

On that note, during the company’s latest earnings call, Marriott made it clear that the increase in leisure travel outweighs concerns about the Delta variant. And Marriott has added 17,456 rooms worldwide to accommodate this trip.

And here’s an interesting aside. The pandemic has blurred the lines between business and leisure travel. Many people have managed to continue working even while engaging in leisure travel. Based on news from many companies, this situation could repeat itself throughout 2022 and possibly beyond.

MAR Is stock a buy?

As I pointed out in the opening, something has to give way with Marriott shares. I was bullish on Marriott as a salvage stock because I think the company is one of the best among hotel stocks. However, at this time, I would like to see more before buying MAR stocks.

Should you invest $ 1,000 in Marriott International now?

Before you consider Marriott International, you’ll want to hear this.

MarketBeat tracks Wall Street’s top-rated and top-performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts quietly whisper to their customers to buy now before the larger market takes hold of… and Marriott International was not on the list.

While Marriott International currently has a “Hold” rating among analysts, top-rated analysts believe these five stocks are better buys.

See the 5 actions here

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