Marriott’s International, Inc
Equity analysis report

Yue (Ashley) Wang
Johns Hopkins Carey Business School
Master of Science in Finance

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Content
Summary of Investment thesis ................................................................................................... 1
Company description ................................................................................................................. 1
Industry Overview and Competitive Positioning ....................................................................... 1
Competitive analysis .................................................................................................................. 2
Investment summary .................................................................................................................. 3
Valuation .................................................................................................................................... 4
1.DCF model ...................................................................................................................................... 4
2. Price Multiple Valuation................................................................................................................. 7
1. Asset Efficiency Analysis ............................................................................................................... 8
3. Solvency Analysis .......................................................................................................................... 9
4. Profitability Analysis .................................................................................................................... 10

Risks to the Thesis ................................................................................................................... 12
Reference ................................................................................................................................. 13
Appendix with sources ............................................................................................................. 14

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Summary of Investment thesis
Marriott made further progress in increasing the size of its new hotel pipeline in 2014.
Global system wide revenue per available room (revPAR) enjoyed another year-over-year increase, climbing 5.8%, with North America particularly strong at 6%. I estimate Marriott’s intrinsic value per share to be $44.85. Marriott’s stock price was overvalued to some extent.
My current base case is for growth in revenue per available room of 5%-6% in 2014 and
2015, with the company benefiting from limited room supply growth in North America and
Europe. The current recovery comes into its fourth year, which will enhance Marriott’s performance. Therefore, I recommend investors to hold Marriott’s stocks.

Company description
Marriott is a worldwide operator, franchisor, and licensor of hotels and timeshare properties in 72 countries and territories under numerous brand names. Marriott operates more than 3,500 hotels and 600,000 rooms in more than 50 countries. It focuses primarily on managing and franchising hotels, with owned and leased hotels constituting approximately 2% of the number of properties in its system. The company's portfolio of brands includes
Marriott, J.W. Marriott, Ritz Carlton, Courtyard by Marriott, Fairfield Inn & Suites by
Marriott, Residence Inn, and Renaissance Hotels.

Industry Overview and Competitive Positioning
Competition in the hospitality Industry anywhere in the world is intense within strategic groups. Industry growth in major cities, capitals or financial centers is high at present partly due to the travelers from tourist groups, business and independent leisure travelers.
Competitive position involves Cost and Differentiation. I use porter five forces to analyze the competitive position of the hospitality industry.
Barrier to Entry: The hospitality Industry exhibits high entry barriers restricting