Why Marriott Stock Is Up By 4% Today

Marriott Shares Gain Ground As Traders Rush To Buy Hotel Stocks After Recent Panic

Shares of Marriott International gained strong upside momentum today as traders rushed to buy them after Friday’s pullback, which was caused by fears over the new variant of coronavirus.

Other hotel stocks like Hyatt Hotels Corporation or Hilton Worldwide Holdings are also moving higher today, and it looks that traders bet that Friday’s panic was not justified.

Currently, analysts expect that Marriott will report earnings of $2.92 per share in the current year. The company’s profits are expected to jump to $5.36 per share in the next year as the travel sector rebounds from the blow dealt by the pandemic, so the stock is trading at 28 forward P/E, which looks rather expensive even in the current market environment.

What’s Next For Marriott Stock?

Marriott stock will likely remain volatile in the upcoming trading sessions as traders evaluate the risks posed by the new variant of coronavirus.

Before the news on Omicron broke, the stock was trying to gain upside momentum after the pullback from yearly highs. Problems with coronavirus in Europe have already put some pressure on Marriott shares, but it should be noted that the market was willing to focus on the company’s future and ignore high valuation levels.

In case Omicron turns out to be a real threat and countries introduce additional virus containment measures, analysts will have to adjust their forecasts for 2022, which will hurt Marriott stock.

At current valuation levels, Marriott stock price dynamics are mostly dependent on market’s view on the trajectory of the hotel demand rebound. If recovery is postponed due to the spread of the new variant of coronavirus, there is a risk of multiple compression, which will hurt the price of the stock. However, if research shows that current vaccines work well against Omicron, Marriott and other hotel stocks may quickly get back to their previous levels.

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