J.P Morgan Gives Color On Marriott International Following Management Meetings

J.P Morgan recently met with Marriott's MAR president and COO, CFO, SVP of global marketing and IRO at MAR's headquarters in Bethesda, MD. In general, JPM walked away from these meetings encouraged by current operating trends and MAR's unit growth opportunities. Given the recent weakness in the stock, JPM believes MAR is an interesting risk-reward at current levels, with downside no worse than the market and upside greater than the market.

J.P Morgan reaffirms its Overweight rating and year-end $50 price target on MAR
given its strong systemwide global unit growth; multiyear ramp in incentive management fees; and substantial free cash flow generating abilities in 2011 and beyond, which should increasingly be returned to shareholders in a meaningful way through buybacks and dividend increases.

MAR is seeing improvement in smaller groups, which in general have shorter lead times, and, importantly, lead times for longer-term, large group meetings are improving as well. Lead times are short relative to normalized levels, but this like-for-like group segment improvement is a positive and should not be overlooked by investors.

MAR is trading higher at $38.05