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Marriott stock should remain on your watchlist for now
After submitting a strong earnings report, shares were issued Marriott International (Nasdaq: March) It is trading above a 52-week high. The Relative Strength Index (RSI) indicates that the rally in the MAR stock may be ready for a reversal.
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This downward trend is echoed by the 13 analysts tracking them MarketBeat. The stock is trading above the target by about 13%. However, there are two sides to the story. And in the past two days, since the company announced its earnings, Marriott has received two target price increases. And while these two analysts are keeping MAR’s stock below its current price, investors should be watching closely to see if there are further upgrades in the near future.
This creates an interesting dynamic for investors. On the other hand, the stock appears to be overvalued. On the other hand, technical indicators point to the stock’s upside.
Companies will start to get more difficult
The company reported earnings in line with analyst expectations of 99 cents a share. Revenue came in better than expected at $3.95 million, contrary to expectations of $3.71 million.
These numbers are clearly much better than the numbers reported in the same quarter of 2020. It is also clear that the results are not as good as the numbers that Marriott published in 2019.
This is where things get interesting for the MAR stock. It’s almost a year since the release of the Covid-19 vaccine was announced Pfizer (New York Stock Exchange: PFE) And BioNTech (Nasdaq: BNTX) Obtained emergency use authorization. Almost on the lead, MAR stock is beginning to recover its pandemic losses. But this recovery was interrupted firstly by the uneven recovery and secondly by the appearance of the delta variable.
With that in mind, this may be the last quarter that Marriott deals with a low bar to jump over. Now it will be necessary for the company to continue to show that revenues and profits are near pre-pandemic levels.
What will the new normal look like?
I have had several occasions to stay in hotels (including full disclosure at some Marriott hotels) in the past six months. Ordinary new words are very appropriate. There are still many concessions to be made for this pandemic. Notable among them is the current state of housekeeping which is still something that guests should not expect for a multi-day stay.
In two cases, the hotels I was staying at were profiting from the wedding party traffic. This gave the hotel a somewhat “normal” feel. On two other occasions, it was clear that it would be some time before occupancy levels returned to normal. Some of this may resolve on its own if and when business travel resumes. But no one can accurately predict what business travel will look like, especially with the issue of vaccine mandates hanging in the air.
However, Marriott said that private company bookings fell less than 40% year-over-year.
Leisure travel boosts inventory
On that note, in the company’s most recent earnings call, Marriott clarified that the increase in leisure travel was offsetting any concerns about the delta variant. Marriott added 17,456 rooms worldwide to accommodate this travel.
Here is an interesting aspect. The pandemic has blurred the lines between business and leisure travel. Many individuals have been able to continue working even while engaging in leisure travel. Based on the news from many companies, this situation may repeat throughout 2022 and possibly beyond.
Did you buy MAR stock?
As I noted in the opening, something has to be served with the Marriott stock. I was optimistic about Marriott as a redemption stock, because I think the company is the best out of the hotel stocks. However, at this time, I would like to see more before buying MAR stock.