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Price: $417.16
Discount category: Far above intrinsic value
Next earnings: 2027-02-09
Next earnings is estimate: Yes
Company name: Marriott International
Sector: Hotel franchising and management
About: Marriott International is one of the largest hotel companies in the world. It manages and franchises hotels and licenses its brands, and it owns or leases only a few hotels. Its brands include The Ritz-Carlton, St. Regis, JW Marriott, Marriott, Sheraton, Westin and Courtyard. At the end of Q3 2026, its system had more than 10,200 properties with nearly 1,834,000 rooms, and its development pipeline had 4,209 properties with more than 634,000 rooms. Its Marriott Bonvoy loyalty program had about 309 million members. Most of its profit comes from fees: franchise and base management fees were $1,341 million in Q3 2026. It reports two segments, U.S. & Canada and International.
Thesis: Marriott trades at a premium because investors pay for a fee business that needs little capital and grows as new hotels open. Marriott expects gross fee revenues of $6,137 million to $6,145 million for 2026. Net rooms grew 4.6% in the year to Q3 2026, and the pipeline reached a record of more than 634,000 rooms. The Marriott Bonvoy program, with about 309 million members, brings direct bookings and higher co-branded credit card fees. Marriott also returns most of its cash, with at least $4.8 billion of capital returns planned for 2026. The price assumes that fees grow faster than the economy for many years. For the premium to be earned, three things must be true. Net rooms must grow 4.5% to 5% a year as the pipeline opens. RevPAR must keep growing after the strong 2026, also in the U.S. and Canada, where it fell 0.1% in Q4 2025. Debt must stay near its present level compared with adjusted EBITDA while buybacks continue, because debt rose to $16.8 billion. The Q4 2026 report with the 2027 outlook, expected in February 2027, gives the next test. If RevPAR growth stops or room growth slows, the premium can shrink within one to two years.
Risks: Hotel demand depends on the economy and on travel. U.S. & Canada RevPAR fell 0.1% in Q4 2025 before it grew again in 2026. A recession can lower RevPAR, fees and incentive management fees quickly. Conflicts and other world events can stop travel to a region. RevPAR in the Middle East fell 43% in Q2 2026 during the conflict there, and the conflict still hurt the region in Q3 2026. Debt rose to $16.8 billion at September 30, 2026 from $16.2 billion at the end of 2025, while Marriott bought back shares. Net interest expense rose to $219 million in Q3 2026 from $194 million. Higher debt leaves less room in a downturn. Online travel agencies, home-sharing platforms and AI booking tools compete for travelers. If they win more direct bookings, the value of Marriott's brands and loyalty program to hotel owners can fall. Results of owned and leased hotels fell to $41 million in Q3 2026 from $70 million because of renovations, a hotel sale and higher costs. This part of the business is small, but it can still lower earnings.
Balance sheet: Cash: $453M Debt: $16.8B Net debt: $16.4B EBITDA, last 12 months: $5.9B Net debt / EBITDA: 2.8× (medium) Interest cover: 5.8× Debt due within 12 months: $409M Marriott funds itself with senior notes, commercial paper and a revolving credit facility. Total debt was $16,843 million and cash was $453 million at September 30, 2026, against $16.2 billion of debt and $358 million of cash at the end of 2025. Commercial paper was $529 million, and $409 million of debt is due within one year. In Q3 2026, Marriott sold $1.25 billion of new senior notes, and it extended its credit facility to September 2031 and raised it to $5.0 billion. EBITDA is adjusted EBITDA for the 12 months to September 30, 2026: Q4 2025 plus the first nine months of 2026. Interest cover is Q3 2026 operating income of $1,274 million divided by net interest expense of $219 million. Marriott pays a quarterly dividend of $0.73 per share and plans capital returns of at least $4.8 billion in 2026. As of 2026-09-30.
Checkpoints: Nov 2, 2026: Q3 2026 results: RevPAR and room growth. Passed. Watch: RevPAR growth above the full-year outlook and net rooms growth near 4.5% pass; falling RevPAR or a lower outlook fail. Outcome: Worldwide RevPAR rose 6.5%, net rooms grew 4.6% and Marriott raised its 2026 RevPAR outlook to 4.5% to 5.0% growth. Feb 9, 2027 (estimate): Q4 2026 results and 2027 outlook. Pending. Watch: A 2027 outlook with RevPAR growth, net rooms growth near 4.5% to 5% and higher capital returns pass; flat RevPAR or slower room growth fail.
Recent events: 2026-11-02: Marriott reported Q3 2026 results. Worldwide RevPAR rose 6.5%, with 7.4% growth in the U.S. & Canada and 4.4% growth in international markets. Adjusted diluted EPS rose to $3.02 from $2.47, and adjusted EBITDA rose 12% to $1,512 million. Net rooms grew 4.6% in a year. Marriott raised its 2026 RevPAR outlook to 4.5% to 5.0% growth and expects adjusted EPS of $12.07 to $12.14 and capital returns of at least $4.8 billion. 2026-09-23: Marriott refinanced its credit facility. It extended the maturity to September 2031 and raised the facility to $5.0 billion from $4.5 billion. In Q3 2026, it also sold $250 million of 4.875% notes due 2029 and $1.0 billion of 5.650% notes due 2036. 2026-08-03: Marriott reported Q2 2026 results. Worldwide RevPAR rose 3.4%, but international RevPAR fell 0.5% because RevPAR in the Middle East fell 43% during the conflict there. Adjusted diluted EPS was $3.19, and Marriott raised its full-year outlook. 2026-05-08: Marriott raised its quarterly dividend to $0.73 per share from $0.67. 2026-05-06: Marriott reported Q1 2026 results. Worldwide RevPAR rose 4.2%, above the high end of its outlook, and adjusted diluted EPS was $2.72. 2026-02-10: Marriott reported 2025 results. Worldwide RevPAR rose 2.0%, adjusted diluted EPS was $10.02 and adjusted EBITDA was $5,383 million. U.S. & Canada RevPAR fell 0.1% in Q4 2025. For 2026, Marriott expected RevPAR growth of 1.5% to 2.5%, net rooms growth of 4.5% to 5% and more than $4.3 billion of capital returns.