Marriott International stock experienced a drop on Tuesday following the company’s release of its fourth-quarter report and 2024 earnings guidance. While the lodging firm reported strong results for 2023, its outlook for the upcoming year fell below Wall Street’s expectations.
Lower-than-Expected 2024 Earnings Forecast
Marriott expects earnings per share for 2024 to range between $9.18 and $9.52. However, analysts surveyed by FactSet had anticipated higher earnings per share at $9.68. The company’s conservative guidance contributed to the decline in stock price.
Slower Growth Projections for 2024
Looking ahead, Marriott predicts a 3% to 5% increase in worldwide revenue per available room compared to 2023. This is a notable decrease from the impressive 15% growth achieved in the previous year. The more modest outlook may have dampened investor confidence.
Pre-market Trading Results
As news of the earnings guidance circulated, Marriott’s stock plummeted by 2.8% in pre-market trading on Tuesday, reaching $242 per share. In contrast, S&P 500 futures saw a smaller decrease of 1.1%. It is worth noting that despite the drop in stock price, Marriott’s shares have shown a substantial 37% increase over the past year due to a surge in travel demand following the pandemic.
Strong Fourth Quarter Performance
Despite the disappointing forecast, Marriott delivered solid results for the fourth quarter of 2023. The company reported earnings per share of $3.57 on revenue totaling $6.1 billion. These figures exceeded analysts’ expectations, who had projected earnings per share of $2.12 on revenue of $6.2 billion.
Furthermore, global revenue per available room saw a modest increase of 7.2% during the quarter, slightly surpassing the projected growth of 7.1%.
Positive Outlook from CEO
Marriott’s CEO, Anthony Capuano, expressed his satisfaction with the company’s performance in 2023. He acknowledged the continued growth in demand for their renowned portfolio of properties and offerings worldwide.
Conclusion
While Marriott International’s fourth-quarter results were promising, the company’s stock experienced a decline due to its lower-than-anticipated 2024 earnings forecast. Nevertheless, with strong performance throughout 2023 and a global recovery in travel, the long-term prospects for Marriott remain optimistic.
