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Marriott Shaking Off Another Bad Quarter

By:
Alan Farley
Published: Feb 18, 2021, 15:07 UTC

Baby boomers with deep pockets are now getting their shots at a rapid pace, ready to unleash pent-up travel demand.

MAR

In this article:

Marriott International Inc. (MAR) is trading marginally lower in the first hour of Thursday’s session after reporting a staggering 59% Q4 2020 revenue decline. The company posted a profit of $0.12 per-share, $0.02 better than estimates, while $2.17 billion revenue missed consensus by more than $200 million. The company noted renewed U.S. and European weakness after a hopeful resurgence in summer bookings, in line with the winter’s brutal second wave.

Pent-up Travel Demand

The hotel chain tried to be upbeat about 2021, indicating they’re seeing early signs the vaccine rollout is bolstering reservations. Of course, that makes perfect sense unless vaccinations slow down or variants keep world citizens afraid of travel. Market watchers will have an opportunity to measure the impact soon because baby boomers with deep pockets are now getting their shots at a rapid pace, ready to unleash pent-up travel demand. Or, at least, that’s the theory.

Executives outlined challenges in the presentation, noting “we have also seen that progress can be slowed by significant spikes in virus cases, such as we saw in the U.S and Europe towards the end of 2020. Global occupancy remained at 35% in Q4, in line with Q3, and still substantially above the trough in April. While no one can know how long this pandemic will last, we are seeing some small, early signs that the acceleration of vaccine rollouts around the world will help drive a significant rebound.”

Wall Street and Technical Outlook

Wall Street consensus is looking ahead to better times, with a ‘Moderate Buy’ rating based upon 4 ‘Buy’ and 6 ‘Hold’ recommendations. No analysts are recommending that shareholders close positions and move to the sidelines. Price targets currently range from a low of $96 to a Street-high $150 while the stock opened Thursday’s session just above the median $128.25 target. Sustained upside is unlikely with this placement until reservations show actual improvement.

The stock topped out in the 140s in the first quarter of 2018 and sold off to 100. A December 2019 breakout attempt failed in February 2020, dumping Marriott to 6-year low in the mid-40s. A fourth quarter advance mounted broken range support, lifting price within seven points of February 2020 price levels in December. Sideways action since that time marks a holding pattern that’s likely to persist until the next positive or negative catalyst hits the travel industry.

For a look at all of today’s economic events, check out our economic calendar.

Disclosure: the author held no positions in aforementioned securities at the time of publication. 

About the Author

Alan Farley is the best-selling author of ‘The Master Swing Trader’ and market professional since the 1990s, with expertise in balance sheets, technical analysis, price action (tape reading), and broker performance.

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