NEW YORK (TheStreet) -- Marriott International (MAR) shares are down 1.2% to $77 in early market trading on Monday after the international hotel chain was downgraded to "neutral" from "buy" by analysts at UBS.
The firm made a valuation call on the stock, noting the 58 points it has gained over the past calendar year and stating that the firm still likes the company's prospects but does not see its meteoric growth being sustainable over the long term.
Marriott International shares have surged 66% over the past 52 weeks, easily outpacing the S&P Index's 14% rise over the same time period.
TheStreet Ratings team rates MARRIOTT INTL INC as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:
"We rate MARRIOTT INTL INC (MAR) a BUY. This is driven by some important positives, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations, solid stock price performance, growth in earnings per share and increase in net income. We feel these strengths outweigh the fact that the company shows low profit margins."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 9.4%. Since the same quarter one year prior, revenues slightly increased by 9.5%. Growth in the company's revenue appears to have helped boost the earnings per share.
- Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 67.32% over the past year, a rise that has exceeded that of the S&P 500 Index. Regarding the stock's future course, although almost any stock can fall in a broad market decline, MAR should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- MARRIOTT INTL INC has improved earnings per share by 25.0% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, MARRIOTT INTL INC increased its bottom line by earning $2.01 versus $1.72 in the prior year. This year, the market expects an improvement in earnings ($2.56 versus $2.01).
- Net operating cash flow has increased to $281.00 million or 44.10% when compared to the same quarter last year. In addition, MARRIOTT INTL INC has also vastly surpassed the industry average cash flow growth rate of -27.89%.
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500, but is less than that of the Hotels, Restaurants & Leisure industry average. The net income increased by 20.0% when compared to the same quarter one year prior, going from $160.00 million to $192.00 million.
- You can view the full analysis from the report here: MAR Ratings Report