Market News

Marriott International Updates 1 Key Risk Factor

Shares of hotel giant Marriott International, Inc. (MAR) have climbed 26.2% over the past 6 months. Marriott’s recent fourth-quarter performance came in ahead of expectations on both its top-line and bottom-line fronts.

A combination of robust demand across leisure and business travel and higher Base management and Franchise fees helped Marriott double its revenue to $4.44 billion, outperforming estimates of $3.99 billion. Earnings per share at $1.30 came in significantly ahead of the consensus estimate of $0.99 per share.

Moreover, the company has entered into a collaboration with Carrier Global Corp. to develop new technologies with the objective of improving areas, including in-room environment and hotel construction.

With these developments in mind, let us take a look at the changes in Marriott’s key risk factors that investors should know.

Risk Factors

According to the TipRanks Risk Factors tool, Marriott’s top risk category is Finance & Corporate, contributing 10 of the total 34 risks identified for the stock.

However, in its recent report, the company has added one key risk factor under the Macro & Political risk category. Compared to a sector average of 4 Macro & Political risk factors, Marriott has 5.

Marriott highlighted that it is subject to risks stemming from the physical effects of climate change and the changes in laws and regulations associated with climate change and sustainability. Further, compliance with future regulations and efforts to achieve emission reduction objectives could be difficult and expensive.

Consequently, Marriott may witness higher operating and compliance costs, operational disruptions, lower demand, limitations on growth, or physical damage to its properties, which may adversely impact the company.

Hedge Fund Activity

According to TipRanks data, the Wall Street’s top hedge funds have decreased holdings in Marriott by 1.4 million shares in the last quarter, indicating a very negative hedge fund confidence signal in the stock based on activities of 14 hedge funds. Notably, Richard Atwood’s First Pacific Advisors has a holding worth ~$167.7 million in Marriott.

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