Marriott International Inc. (MAR) is trading higher by 2% in Wednesday’s pre-market after beating Q1 2022 profit estimates by a wide margin and reinstating its dividend after suspending the payout in February 2020. The company reported earnings of $1.25 per-share, $0.33 higher than expectations, while revenue rose a healthy 81.3% year-over-year to $4.2 billion, just below consensus. Occupancy rose from 45% in January to 64% in March, less than 10% below pre-pandemic levels.
Business Travel Returning to Normal
The lodging giant reported the largest surge in global demand since the start of the pandemic, with massive immunity generated by vaccines and natural infection dropping hospitalization rates. The end of most government mandates has encouraged businesses to reinstate physical travel, finally walking away from the virtual meeting place, hopefully for the last time. Even so, travel costs are soaring due to rising fuel prices, causing some companies to retain cheaper alternatives.
Marriott also reported a strong quarter in February but Omicron kept many investors on the sidelines. The company is faring better than many rivals, with Hilton Worldwide Holdings Inc. (HLT) missing revenue estimates and issuing downside guidance on Tuesday. That stock is now trading at a three-week low after posting an all-time high in April. Technically speaking, Hyatt Hotels Inc. (H) is the weakness of the three majors, still oscillating near February 2020 resistance ahead of May 10th earnings.
Wall Street and Technical Outlook
Wall Street consensus stands at a mediocre ‘Hold’ rating based upon 7 ‘Buy’, 1 ‘Overweight’, 14 ‘Hold’, and 1 ‘Underweight’ recommendation. No analysts are recommending that shareholders close positions. Price targets currently range from a low of $164 to a Street-high $210 while the stock is set to open Wednesday’s session about $3 below the median $179 target. This modest placement bodes well for an uptick reaching the all-time high at 196, posted just two weeks ago.
Marriott topped out near 150 in 2018 when President Trump started the trade war with China. It tested that price level in February 2020 and sold off to a 6-year low during March’s pandemic decline. The subsequent rally reached resistance in March 2021, ahead of a September breakout that eased into a rising channel pattern. That bullish formation is still in place, suggesting the stock is engaged in a long-term uptrend that reaches 200 as the next short-term target.
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Disclosure: the author held no positions in aforementioned securities at the time of publication.