Marriott’s Global Expansion and 17% Surge Raise New Questions About Share Price in 2025
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Ever wonder if Marriott International’s current price tag actually matches up with its real value? Let’s peel back the layers to see what’s under the hood.
The stock has seen some notable momentum, racking up a 17.0% gain over the past month and a 93.8% jump in the last three years. This has caught the eye of growth-focused investors and value seekers alike.
In the headlines, recent news about Marriott’s expansion into new international markets and its strategic acquisitions has sharpened the focus on its growth prospects. Investors are watching closely to see how these moves could impact long-term value and risk perception.
When it comes to valuation, Marriott International currently scores 0 out of 6 on our undervaluation checks. This raises the question of whether it is running hot compared to its fundamentals. Stick around as we break down the classic valuation approaches and reveal a smarter way to judge if Marriott is worth your investment at the end of this article.
Marriott International scores just 0/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.
The Discounted Cash Flow (DCF) model estimates a company’s intrinsic value by forecasting its future cash flows and discounting them back to today’s value. This method provides a forward-looking assessment based on projected free cash flows.
For Marriott International, current Free Cash Flow stands at $1.91 billion. Analysts project steady growth, with free cash flow expected to reach $4.20 billion by 2029. After 2029, additional years are extrapolated by Simply Wall St, with 2035 cash flow forecasted at $5.52 billion. All projections use the US dollar.
Based on these inputs, the DCF model estimates Marriott’s fair value at $269.35 per share. The current stock price trades around 13.2% above this intrinsic value, which implies that the market is pricing in higher expectations than the forecasted cash flows support.
The price-to-earnings (PE) ratio is a widely used valuation metric for companies like Marriott International that generate steady profits. It helps investors gauge whether a stock is expensive or cheap relative to its current earnings. Generally, a higher PE ratio suggests the market has strong expectations about future growth or is willing to take on added risk for a premium brand.
Marriott’s current PE ratio stands at 31.3x, which places it above both the broader hospitality industry average of 21.4x and its peer group’s 29.0x. These elevated multiples signal that the market anticipates stronger growth, higher profitability, or lower risk compared to its rivals.
To provide deeper perspective, Simply Wall St introduces the Fair Ratio. This is a proprietary valuation multiple that factors in Marriott’s forecasted earnings growth, industry position, profit margins, market capitalization, and risk profile. Unlike basic comparisons to the industry or peer group averages, the Fair Ratio gives investors a more holistic view of what a reasonable multiple for Marriott should be based on its unique financial dynamics.
For Marriott, the Fair Ratio is calculated at 28.0x. With the actual PE ratio only slightly above this at 31.3x, the stock’s valuation appears about in line with its justified fair value, given the company’s growth outlook and industry characteristics.
Earlier we mentioned that there’s an even better way to understand valuation, so let’s introduce you to Narratives. Narratives are a simple, powerful tool that lets you link the company’s story, your personal perspective on its future drivers, risks, and potential, with a financial forecast and a fair value estimate. Instead of relying solely on rigid calculations, Narratives let you connect the numbers with real-world reasoning, making it easier to see and justify the assumptions behind your view of Marriott International’s value.
This gives investors more than just raw data; Narratives help you explain your investment thesis and instantly see the fair value that comes out of your story. On Simply Wall St’s Community page, used by millions of investors, you can easily create or explore Narratives, compare your own scenario to others, and see how your fair value stacks up against the crowd or consensus. Best of all, Narratives update automatically whenever new information, like earnings, news, or big announcements, emerges, so your view always stays relevant.
For Marriott International, some investors are bullish, building Narratives where global expansion and loyalty program success justify price targets as high as $332. Others take a more cautious view, highlighting margin pressure and macro risks, leading to values as low as $205. This range shows just how dynamic your investment decision can be when you build your own Narrative and compare it to the current market price.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Companies discussed in this article include MAR.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com
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