Marriott initiated with a Buy at Goldman Sachs

Goldman Sachs initiated coverage of Marriott with a Buy rating and $267 price target. The backdrop for lodging in 2024 “remains choppy,” with most companies lowering second half of the year outlooks, drawing late-cycle concerns and debate about whether the stocks are priced for perfection, the analyst tells investors in a research note. The firm prefers stocks with “less macro-sensitive exposure” and higher exposure to ancillary opportunities to drive continued EBITDA growth from here. Goldman likes Hilton (HLT) and Marriott (MAR) for their “best-in-class” free cash flow compounding growth, with above-industry long-term algorithms. The firm likes Wyndham Hotels & Resorts (WH) for accelerating room growth and an “undemanding valuation. It says to sell Choice Hotels (CHH) as the company’s lower net unit growth and cash flow conversion will weigh on its valuation. Goldman also advises selling Hilton Grand Vacations (HGV) and Marriott Vacations Worldwide (VAC), saying pockets of a slowing consumer have been showing up via new buyer close rates and rising loan loss provisions. It is Neutral rating on Hyatt Hotels (H) and Travel + Leisure Co. (TNL), believing they screen less attractive on valuation and exposure to growth themes.