Is Marriott Stock A Buy?

Is Marriott Stock A Buy? Of all the industries impacted by the COVID-19 pandemic, the travel and lodging industries are arguably one of the hardest hit.

With travelers from all over the globe confined to their homes during lockdowns and still unable to travel outside of their country even after lockdowns were lifted, it can be hard to gauge just how devastating a year of significantly less travel will be on these industries in the coming years.

Naturally, this massive decrease in sales and ongoing uncertainty surrounding travel going forward has resulted in quite a rocky market for these industries on the New York Stock Exchange. However, this might actually make it the perfect time to invest. Marriott stock is just one of several examples worth exploring.

Marriott Is Much More Than A Hotel Operator

While most people instantly recognize the Marriott name as a hotel chain, Marriott International does a whole lot more than just operate hotels here in the United States.

They’re a multinational company responsible for owning, operating, franchising, and licensing all types of lodging, including timeshares, residential properties, and, of course, hotels. As a matter of fact, they’re currently the largest hotel chain on the planet if you look at the sheer number of rooms under their name: over 1.4 million across over 130 countries. And all those rooms translate to optimistic revenue forecasts.

Beyond their name-brand hotels, Marriott also operates what is known as the Luxury Collection. These are soft-brand hotels, which are historic buildings that retain their original names despite being included underneath Marriott’s umbrella. These include the Palace Hotel in San Francisco, the Park Tower Knightsbridge Hotel in London, the Royal Hawaiian Hotel in Honolulu.

They also operate 30 international hotel brands including the Ritz-Carlton and Sheraton Hotels and Resorts.

How High Will Marriott Stock Go?

It goes without saying that the COVID-19 pandemic impacted practically every single person and every single business the world over. Marriott is just one of what is surely millions of others who suffered as a result of the coronavirus, but the timing couldn’t have been worse for them:

Their price per share had just hit its highest point in the company’s history in December of 2019, mere weeks before the world truly began to understand the true scope of what the virus could do to the world. They dropped from $152 a share at the end of December 2019 to just over $59 a share at the start of April 2020.

In the months that followed, Marriott began a slow and steady return toward their former high around 2x higher.

If the world continues to recover as well as it has and people continue to be more and more comfortable with traveling, then investors and traders shouldn’t be surprised if Marriott exceeds that December 2019 high and reaches nearly $175 by this time next year in the best-case scenario.

Tall Order: Marriott Needs The World To Open Up

Of course, even though prospects do seem promising on the surface, there are always those risks to consider in the back of your mind. While COVID-19 cases continue to decline here in the United States, they’re still rising to record highs in other areas of the world that don’t have access to a vaccine just yet.

Because of this, it’s not totally out of the question to continue to see waves of the coronavirus come and go in many of the hottest travel destinations around the world, including Canada and much of South America, Europe, Asia, and Africa.

This is undoubtedly the biggest risk of buying Marriott. Beyond this, there’s also the simple fact that continued improvement in a future post-COVID world could result in Marriott stock leveling out — not rising, not falling, but simply staying in the range of $140 per share.

Either one of these things isn’t totally unlikely, and both are risks worth considering.

Marriott Vs Competition From Hyatt, Choice & More

Marriott might be the biggest hotel chain, but that doesn’t change the fact that there are other chains in competition with them.

Hyatt (H), Choice Hotels, Wyndham, MGM, and Hilton are all publicly traded on the New York Stock Exchange, and they’re all performing well against Marriott.

The answer to the question of whether or not Marriott’s competitors can come out on top all depends on how the rest of the pandemic turns out throughout the rest of the world. As long as Marriott keeps their doors open throughout those 130+ countries, they should remain on top.

The Bottom Line: Is Marriott Stock A Buy?

To determine whether or not Marriott stock is a buy, let’s consider all the factors discussed thus far: First off, there’s the fact that Marriott is a large part of the travel and lodging industry, which has been hit incredibly hard the past year or so.

However, Marriott’s quick bounce back on the stock market has proven that they’re in this for the long haul and won’t be shuttering as a result of the pandemic like many other businesses have had to do.

Then, there’s the uncertainty of just how high Marriott stock will go. But, on the other hand, it does seem likely that Marriott’s price per share will continue to grow as it has been lately.

Most important to consider are the risks outlined above, which pose a serious threat to the future prospects of Marriott stock.

While there’s no way to know for sure exactly which (if any) of these risks will actually come into play, it’s still necessary to weigh them and discuss them before buying. With all these factors in mind, it seems pretty clear that — despite the risks — Marriott stock is definitely a buy right now.

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The author has no position in any of the stocks mentioned. Financhill has a disclosure policy. This post may contain affiliate links or links from our sponsors.