Marriott: Current Economic Conditions Are Conducive to Enduring Demand Growth; Shares Pricey

Despite reduced savings and elevated inflation, we are more constructive on intermediate-term revenue per available room, or revPAR, for Marriott, based on our findings of past environments of stout US industry growth. As a result, we have increased our 2026-28 Marriott revPAR to an average annual growth rate of 5.3% from 3.5% previously and our fair value estimate to $253 per share (or 14.6 times 2025 EV/EBITDA) from $228. Despite our expanded valuation, we see shares as overvalued, but we wouldn't need much discount to our fair value estimate to recommend shares of this brand advantaged wide-moat company.