The firm hiked its price target to $88 from $83 on the stock.
Marriott's acquisition of Starwood Hotels & Resorts Worldwide (HOT) will likely be "highly accretive," adding at least $5 per share in the near-term and $8 per share after synergies are realized, Canaccord said in a note.
Macro concerns have pushed the stock down more than 10% during the past month, but the U.S. is not entering a recession, the firm contends.
Canaccord therefore sees upside to Marriott's buy-side revenue per available room forecast, as it will control 14% of total U.S. market share and 48% of luxury market share. Hilton is the second-biggest competitor, with 11% and 23%, respectively, the firm adds.
Shares of the hotel operator are flat in pre-market trading on Friday after closing down 4.06% to $68.78 on Thursday.
Separately, 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 a few notable strengths, 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, impressive record of earnings per share growth and increase in net income. We feel its strengths outweigh the fact that the company shows low profit margins.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- MAR's revenue growth has slightly outpaced the industry average of 1.5%. Since the same quarter one year prior, revenues slightly increased by 3.4%. Growth in the company's revenue appears to have helped boost the earnings per share.
- MARRIOTT INTL INC has improved earnings per share by 20.0% 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 $2.54 versus $2.01 in the prior year. This year, the market expects an improvement in earnings ($3.12 versus $2.54).
- The net income growth from the same quarter one year ago has greatly exceeded that of the S&P 500, but is less than that of the Hotels, Restaurants & Leisure industry average. The net income increased by 9.4% when compared to the same quarter one year prior, going from $192.00 million to $210.00 million.
- Net operating cash flow has increased to $328.00 million or 16.72% when compared to the same quarter last year. In addition, MARRIOTT INTL INC has also modestly surpassed the industry average cash flow growth rate of 7.11%.
- MAR has underperformed the S&P 500 Index, declining 6.75% from its price level of one year ago. Looking ahead, although the push and pull of the overall market trend could certainly make a critical difference, we do not see any strong reason stemming from the company's fundamentals that would cause a continuation of last year's decline. In fact, the stock is now selling for less than others in its industry in relation to its current earnings.
- You can view the full analysis from the report here: MAR