Marriott International (MAR) second quarter 2010 earnings were ahead of the Zacks Consensus Estimate, reflecting a higher-than- expected RevPAR growth, particularly in North America. The company has also raised its fiscal year 2010 outlook.
In recent months, the entire industry has started showing signs of RevPAR improvement. Going forward, the company’s strong pipeline, significant international exposure, solid balance sheet, lower operating cost structure, favorable pricing, a larger platform with more rooms and increased market share augur well for its earnings.
Additionally, considering the reviving lodging industry and increasing occupancy rate, we expect the top-line improvement to gain momentum going forward. Hence, we are upgrading the stock from Neutral to Outperform.