NEW YORK— Although this morning Marriott International reported in line Q2 EPS of $0.50 vs. $0.50 in 2000, Goldman Sachs Lodging Research lowered its forecast for the rest of 2001 based on “weak same store trends.” The research firm noted, “If the stock is under significant pressure we would be a buyer based on the expected turnaround in industry fundamentals in 2002 and the strength of Marriotts brand, management and unit growth story.” However the group said it lowered its 2001 and 2002 estimates below management guidance to $1.90 from $2.05 for 2001 and to $2.25 from $2.35 for 2002. Marriotts 2Q report looks like an early negative indicator of trends to come, said analysts at Goldman Sachs Lodging Research, noting that Q2 Marriott RevPAR growth was down 5.6%— the worst quarter in over four years. On a more positive note, the firm said that Marriott’s unit growth is right on track. Marriott has opened 22,000 new hotel rooms, and is nearing its 35,000 new unit forecast. Goldman Sachs Lodging indicated that a good time to buy Marriott stock would be if the stock trades down below $42— the EV/EBITDA multiple would be 9.6 times, which is an attractive entry multiple for a consistent cash generator-industry leader. Starwood and Hilton are not expected to do as well with the Q2 reports, said the firm.
